SAN FRANCISCO (Reuters) -- Ford Motor Co. is poised to take advantage of steadier auto sales and increasing U.S. market share by stepping up production, CEO Alan Mulally said Thursday.

Mulally also said the automaker would use the $5.9 billion in federal loans it was awarded this week to fund its established investment plan.

"Our business plan assumed about the amount we got," Mulally told Reuters. "It's very consistent with our plan."

Ford, the only U.S. automaker to have avoided a government-sponsored bankruptcy, has been gaining retail market share in the United States and announced plans earlier this month to bump up production for this quarter and the next.

Automakers book revenue when vehicles are sold to dealers. A rebound in output is seen as crucial to any turnaround for the industry after the deep cost cuts by Ford and others in recent years.

Ford posted a record loss of $14.7 billion in 2008 and losses totaling $30 billion over the past three years.

Mulally said Ford "will continue to size production with demand. But clearly with our market share gain, we're increasing production to support the desirability of Ford products."

Ford continues to expect a return to profit by 2011, he said. The No. 2 U.S. automaker had no new plans to address its debt balance.

"We have no plans that we haven't announced," Mulally said on the sidelines of the Edison Electric Institute industry conference. "The only plan is that we will get back to profitability in 2011."

Ford raised $23 billion in late 2006 to support its restructuring, a liquidity cushion that has made it Detroit's sole survivor of the recent auto sales collapse.

But more recently, analysts have raised concerns about the level of Ford's debt, especially since cross-town rival General Motors plans to emerge from bankruptcy in coming weeks with sharply reduced debt.

Mulally: Ford can finance its turnaround

In a pair of market transactions, Ford reduced its debt by $9.9 billion in April in exchange for cash and new shares and then raised $1.6 billion by issuing new shares.

"We're really on plan with our plan to finance our transformation," Mulally said. "Clearly, we have sufficient liquidity and we've reduced our cash burn and we've also provided guidance that we are going to continue to reduce our cash burn every quarter through this year."

This week, Ford won $5.9 billion in U.S. Department of Energy loans to retool factories as it invests in rechargeable cars, fuel-efficient engines and hybrids.

Mulally said Ford could be in line for more funding from the Energy Department program. The agency has $17 billion in additional funding for loans to auto companies and congressional allies of the auto industry are backing efforts to allocate another $25 billion.

A greenhouse emissions bill pending in Congress would double that amount to $50 billion. Ford's original total request was $11 billion.

"We don't know," Mulally said when asked about the prospect of more federal loans for Ford. "It will be evaluated as we go. I think (Energy Secretary Steven Chu) said that he's anticipating that more money will be allocated because it's so important and a lot of the participants wanted funding."

Under Mulally, a commitment to more fuel-efficient and battery-powered cars and hybrids has become a central element of the Ford turnaround plan.

"We see more and more electrification, both hybrids and battery electric vehicles," Mulally said.

Since the start of the year, Ford has announced plans to introduce a battery-powered commercial van in 2010, a battery-powered small car the following year and a plug-in hybrid to challenge the Volt starting in 2012.

Ford's new Fusion hybrid sedan went on sale in March.

The stakes are high because Ford's planned investment is coming at a time when the U.S. government is demanding steep increases in fuel economy and has put money forward to help automakers adopt new fuel-saving technologies.

In an earlier speech to the electric power industry conference, Mulally said the U.S. economy was showing signs of being "near bottom," with growth expected in the third and fourth quarters.

U.S. gross domestic product fell at a 5.7 percent annualized rate in the first quarter.

Mulally said he had nothing new to announce on Ford's progress toward a sale of Volvo, its Swedish luxury brand.

"Nothing new," Mulally said.