General Motors, Ford and Chrysler, which have suffered from a steady loss of market share to Asian rivals, ended July with just 48.1 percent of the market.

Chrysler was surpassed by Honda for the first time in July and Ford continued to cede the number two spot to Toyota.

Asian carmakers captured 44.6 percent - with Toyota Motor accounting for 17.1 percent of the market - while European brands held 7.3 percent, according to Autodata.

The decline in share came as American carmakers cut back sharply on low-margin sales to rental companies in the midst of an industry-wide slump.

All but one of the top six manufacturers reported a decline in sales during July as higher gasoline prices and turmoil in the housing market helped trim overall sales by an estimated 12 percent.

But the Big Three were hit hardest at a time when they can ill afford it.

Since the end of 2005, GM and Ford have cut their payrolls by more than one-third and invested more than 14 billion dollars in massive restructuring programs aimed at making them more competitive.