DETROIT (Reuters) -- Ford Motor Co. is expected to gain U.S. market share in the next few years and rivals General Motors and Chrysler may see sharp declines following their bankruptcies, a report says.

Ford's share of the U.S. market could rise 3 percentage points over the next four years to about 18 percent, overtaking GM, according to the annual "Car Wars" study from Merrill Lynch. A realistic GM share would be closer to 15 percent or 16 percent.

The forecast adds to the perception that Ford may be able to sustain its momentum after avoiding bankruptcy and surviving without U.S. loans. The company boosted its U.S. share by about a third of a point through June from a year earlier, to 16.1 percent, after losing ground in its home market for 13 straight years. As a result, it has overtaken Toyota Motor Corp. to again rank No. 2 in the United States, behind GM.

GM emerged from a U.S.-steered bankruptcy last week as a much smaller automaker, and Chrysler exited Chapter 11 protection in June through an alliance with Italy's Fiat S.p.A.

GM aims to focus on its Buick, GMC, Chevrolet and Cadillac brands, while trimming Saab, Saturn, Hummer and Pontiac from its U.S. lineup.

"We continue to believe Ford is effectively executing on its restructuring plan, while bolstering liquidity, and view the results of our Car Wars study as further evidence that management is making all of the right moves," Merrill Lynch analyst John Murphy said in a separate note to clients on Wednesday.

Not so rosy

Merrill Lynch raised its price objective on Ford stock to $8.75 from $7.50. It also said the market share gains could lead the automaker to post better than break-even earnings per share in 2010 and possibly $1 per share for the year in 2011. Ford last recorded an annual profit in 2005.

The study gave a much less rosy outlook for GM and Chrysler, predicting a 5 percentage point drop in GM market share over four years and a 6 percentage point drop at Chrysler that would leave it half its current size.

GM's share slipped almost two points in the first half, to 19.7 percent. Chrysler had a similar decline, dropping to 9.8 percent from 11.7 percent halfway through 2008.

"Chrysler's product pipeline is dubious and likely to drive significant market share losses," the study said. Chrysler plans to introduce Fiat-designed small cars into the U.S. market starting in about 18 months.

Merrill Lynch also said it sees Korean automakers Hyundai Motor Co. and Kia Motors gaining significant market share, about 3.5 percentage points, over the next four years, and Honda Motor Co. gaining 3 percentage points.