Once popular SUVs have been hit by the rising cost of fuel

General Motors said its sales were down by 10.2% on a year ago, while rivals Ford and DaimlerChrysler saw their sales fall 8.7% and 2% respectively.

By contrast, Toyota said its US sales increased by 8.2% in December.

Japan's leading car company is currently on course to overtake GM as the world's largest carmaker.

The challenges facing the American manufacturers should serve as a wakeup call for the European manufacturers Mike Steventon KPMG Car firms reel ahead of Detroit

Toyota said it secured a 13.3% share of the US car market in 2005, taking it close to Chrysler's 13.6% share.

Changing tastes

GM and Ford have been struggling to reverse declining sales and profits in the key US market.

Both companies have seen sales of their gas-guzzling sports utility vehicles, or SUVs, hit by changing consumer tastes and the rising cost of fuel.

Of the three major Detroit carmakers, German-controlled Chrysler was the only firm to report higher sales in 2005. GM and Ford both saw their sales fall by 4% during the year.

Overall, US carmakers saw their share of the US market slip to 57%, while Asian firms saw their share increase to 36.5%.

"It was good year for car sales overall, but GM, Ford suffered particularly because of the collapse of their big SUVs," said Dave Healy, an analyst at Burnham Securities.

However, GM saw its prospects improve in China, where the firm's sales jumped by 35.2 percent last year to a record 665,390 vehicles.

In December, Toyota said that it expected to boost output by 10% in 2006, a level which could see the company overtake General Motors as the world's biggest carmaker.

The firm, which has been investing heavily in its US production, forecast that it would build a record 9.06 million vehicles in 2006, on the back of strong demand across the world for its cars.

Toyota overtook Ford to become the second-biggest carmaker in 2003.