Toyota has completed a dismal start to the year for America’s struggling car industry by overtaking General Motors to become the world’s biggest vehicle manufacturer.

The Japanese giant inched past GM during the first quarter with sales accelerating 9.2 per cent to a record 2.35 million cars and trucks.

Sales at GM rose 3 per cent to 2.26 million.

Toyota’s success comes after a slew of huge job cuts by American car firms as they struggle to compete with the strong growth of their Japanese rivals.

Ford earlier this year revealed the biggest loss in its history.

DaimlerChrysler is cutting 13,000 jobs in North America and has put its Detroit-based Chrysler unit up for sale.

Toyota’s success is being driven by its sales in the US. Its Camry saloon is now America's most popular car.

Analysts had predicted that Toyota would take the top spot this year. GM has held the position for 76 years.

Katsuaki Watanabe, Toyota's president, insisted before Christmas that surpassing GM was not the group’s goal but would be a “result of what we’ve been doing”.

Ichiro Takamatsu, chief investment officer at Alphex Investments in Tokyo, told Bloomberg: “Toyota was poised to top GM sooner or later because its momentum is much stronger than GM’s.”

Toyota is building its seventh North American plant in Ontario, Canada and has plans to build two million vehicles a year in North America by 2008. An eighth factory will open in Mississippi in 2010 to build Highlander sports-utility vehicles.

GM has been targeting expansion in Russia, India and China. Its investment in China is expected to top $1 billion annually.

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