Car and truck sales will continue to be strong in the United States throughout 1986, despite warning signals that sales may be weakening, according to two separate Wall Street reports on the near-term future of the domestic auto market.

But sales of foreign and domestic vehicles in this country will reach their peak in 1988, and then begin a downhill roll that could last for several years, the reports said.

In the process, the three biggest native U.S. auto makers will lose market share to foreign competition, according to the reports by Sanford C. Bernstein & Co. Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc.

But the Big Three companies -- General Motors Corp., Ford Motor Co. and Chrysler Corp. -- generally have done a good job of reducing their costs and diversifying their income bases since the last recession. Because of those changes, the companies are not likely to suffer the same kinds of financial losses that they sustained during the protracted downturn in auto sales in the early 1980s, the reports said,

"The current auto expansion, contrary to popular notions, will prove quite durable, and we do not expect the peak to be reached until 1988," said the Bernstein report, the most optimistic of the analyses.

"Low inflation, moderate interest rates, plentiful credit . . . and continued growth in consumer demand all suggest such an outcome," the Bernstein report said. It also said that new-car sales in the United States will at least match the 15.7 million units sold in this country last year.

Merrill Lynch also predicted that new-car sales in the U.S. market will "hold steady this year" and through much of 1987. But the Merrill Lynch report said that the strength of those sales probably will depend more on the domestic auto makers' willingness to offer bigger and bigger sales incentives than it will on consumer demand.

"Heavier incentives will be required to yield the same results and, thus far, the incentives have been less attractive than those offered last year," the Merrill Lynch report said. "However, heavier incentives are an option that remains open for manufacturers to spur sales to higher levels."

That brings up another point: Dealers of domestic and foreign cars are chafing over price hikes that over the last six months have added an average $1,028 to Japanese cars and an average $800 to GM cars sold in the United States.

GM's last announced hike of 2.9 percent, effective next Monday, prompted an uncharacteristically sharp response from the National Automobile Dealers Association, which is based in McLean and which represents 24,000 U.S.-make and foreign-make dealers.

"Today, new-car dealerships are heavily engaged in price discounts to reduce car inventories, and are working with less-effective incentive programs from manufacturers. So, higher prices just aren't logical," NADA said.

GM declined comment. In announcing its new price increase last month, however, the company said that the rise was needed for partial recovery of "higher labor and other manufacturing costs."

But auto industry analysts said that GM's higher sticker prices are a sales ploy: The company will attempt to lure more customers by offering seemingly steep discounts from a higher base price.

Ford and Chrysler have not raised prices on their domestically produced models since last fall. But Chrysler this week announced that it was raising prices on its imports from Japan's Mitsubishi Motors Corp. by 3.9 percent to reflect the continued weakening of the dollar against the yen.