US carmakers, coming off a year of record concessions from labour unions, should be facing this year with a new lease of life as they fight Asian and European importers who now control more than half of the US market.

But the question hanging over the industry's largest annual trade show that opened on Sunday was whether the US market for cars and trucks may now spin into the kind of steep downturn it has avoided for the past decade and a half.

US car sales fell for the second consecutive year, last year, dragged down by a slowing economy, a slumping housing market and tighter credit markets that pinched less credit-worthy borrowers - all trends that carried into this year.

Chrysler one-upped the Hollywood glitz on Sunday, unveiling an updated version of its best-selling Dodge RAM pickup truck by having cowboys drive a herd of Texas longhorn cattle down the street outside the arena.

Sales of cars and light trucks in the US fell 2.5 per cent from a year ago to 16.15 million vehicles. Many analysts and industry executives see a risk that sales could drop to near 15.5 million this year.

Industry tracking service CSM Worldwide already expects the rate of annualized US light-vehicle production to fall from 15.5 million units in January to a trough of 12.9 million by March before stabilising.

General Motors Corp chief executive Rick Wagoner said a worsening US economy would hamper the company's North American turnaround.

The largest US automaker, which lost more than $10 billion in 2005 and 2006, is in the midst of a restructuring that includes slashing more than 34,000 jobs and closing 12 plants in North America.

GM has removed $9 billion in structural costs and reached a landmark deal with the United Auto Workers union late last year that will allow it to slash more costs in 2008 and beyond.

Luxury European brands like Audi and BMW were confident in forecasts for sales growth in their profitable brands despite outlooks for potential lower US consumer spending due to credit and employment problems in 2008.

Japanese carmakers, pioneers in fuel-sipping hybrids and other fuel economy technology, also forecast more growth.