The "Big Three" US carmakers have continued to lose ground against their Asian rivals.
US-made cars have been hit by tough competition from Asia
Ford, General Motors (GM) and Chrysler have all reported a drop in car sales during 2006 - Ford sales fell 8%, GM dropped 8.7% and Chrysler slid 5%.
By contrast both Japanese carmakers Toyota and Honda posted a rise in annual of 12.9% and 3.5% respectively.
Rising petrol prices have boosted Asian firms in recent years as buyers opt for more fuel efficient vehicles.
Most US carmakers have suffered from the decline in demand for so-called "gas-guzzling" Sports Utility Vehicles (SUVs) and trucks.
Truck sales hit
December sales at GM were worse than forecast - dropping 13% on the month - and led by a 19% fall in truck sales. Car sales fell 1.6%.
US ANNUAL CAR SALES*
FORD - 2.9m vehicles, down 8%
GM - 4m, down 8.7%
CHRYSLER - 2.4m, down 5%
TOYOTA - 2.5m, up 12.9%
Ford itself said car sales had risen in December, as Americans switched to smaller, more efficient vehicles, while truck sales were down 14% compared with December 2005.
The company blamed rising fuel prices and a soft housing market for poor truck sales.
However, Ford has held onto its position as number two US seller ahead of Toyota.
Toyota, which has already overtaken Ford in the world market, is widely expected to take GM's crown as the world's leading automaker in 2007.
Industry experts widely expect the Asian firm to overtake Ford in the US domestic market during the year as well.
Falling US sales have prompted Ford and GM to embark on huge restructuring drives in an effort to boost profitability.
GM has plans to cut 30,000 jobs, close several factories by 2008 and sold off a majority stake in its GMAC finance unit as it battles to cut its losses. Ford meanwhile is set to cut around 38,000 jobs
Toyota, meanwhile, has announced plans to build six more factories around the world by the end of the decade.