Toyota was Australia's best-selling brand in 2008 with 238,983 cars sold, followed by Holden with 130,338 sales and third-ranking Ford selling 104,715 cars.

The Federal Chamber of Automotive Industries (FCAI) shows in its VFACTS sales data released on Tuesday that 1,012,164 passenger cars, SUVs and commercial vehicles were sold in 2008 - down 3.6 per cent or 37,818 vehicles compared to 2007.

The December sales figure of 76,510 was down 11.3 per cent on December 2007 but still pushed the result over the one million sales benchmark.

Light commercial vehicles were a major contributor to the overall market result with the segment increasing 4.2 per cent during 2008.

The passenger car segment ended the year down 6.3 per cent compared to 2007, while sales of SUVs (sports utility vehicles, mainly four-wheel drives) were down 1.9 per cent and heavy commercial were down 3.5 per cent.

"It's a great result, it's an outstanding result, it's the second highest outcome on record," FCAI chief executive Andrew McKellar told reporters in Sydney on Tuesday.

"Indeed, it's a testament to the competitive nature of the Australian motor industry.

"Australia's three local manufacturers remain the top three selling brands, reinforcing the importance of the local manufacturing sector as a cornerstone of the Australian (motor) industry," Mr McKellar said.

"In order, Toyota, Holden and Ford accounted for a total of 474,036 sales.

"That is 46.8 per cent of the entire market in 2008."

The Holden Commodore was the top-selling vehicle, the 13th year in a row that it has held that position.

Looking ahead, the FCAI forecasts that 880,000 new vehicles will be sold during 2009, a downturn of 12 to 13 per cent.

"The message for 2009 is we must maintain our confidence," Mr McKellar said.

The strong showing by the Australian motor industry is in sharp contrast to the situation in the US, where Chrysler has reported a 53 per cent drop in sales in December, and Ford, GM and Toyota have reported drops of between 30 and 37 per cent.