European carmakers are at last gaining traction in their decades-long campaign to persuade American car buyers to switch from petrol to diesel.

Volkswagen boosted sales of diesel models 46.2 per cent last month compared with a year earlier, more than double the increase in its overall US sales, the German carmaker told the Financial Times.

Demand for some VW diesel models now outstrips suppl

The battle between Toyota and Honda for supremacy in the hybrid petrol-electric car market is set to heat up with both Japanese carmakers set to introduce distinctive new models early next year.

Honda disclosed details on Wednesday of a hybrid hatchback that will be smaller and cheaper than its existing Civic hybrid sedan.

Toyota is due to unveil a larger version of its popular Prius. It has so far kept a low profile on the new model to avoid damping sales of the existing Prius.