Ford has reported a massive 27 per cent loss in second-quarter earnings prompting fears that any recovery in the US automotive market remains a long way off.

A rising number of incentives added to the poor performance but continuing weak sales in the world's biggest market have proved the major factor.

Ford said it earned $417 million in the second quarter, down from $570 million a year earlier.

Indeed, whilst the figures remain in accordance with the company's own estimate of its financial performance, nearly all second-quarter profits came from the firm's finance arm, Ford Credit.

In comparison the automotive unit earned just $3 million as diminishing sales hit automotive pre-tax profits by $1.1 billion.

Ford's American sales fell by 2.8 per cent in June in comparison to last year, while the firm acknowledged that European operations were also suffering.

Following a performance described by the manufacturer as 'unsatisfactory', Ford announced it had lowered estimates for European industry-wide sales this year to 16.3 million vehicles from 17 million.