Toyota Falls Short of GM in Global Sales Thursday January 24, 1:26 am ET

Toyota Still No. 2 After Falling About 3,000 Vehicles Short of GM in Global Vehicle Sales

TOKYO -- General Motors, a symbol of American industrial might and the world's top seller of motor vehicles since Herbert Hoover was president, has been all-but-overtaken by a foreign rival.

Toyota said Thursday it sold 9.366 million vehicles last year globally, about 3,000 vehicles fewer than the tally from General Motors Corp., just barely allowing the U.S. automaker to retain its crown as the world's No. 1 automaker.

All year long, the two automakers raced neck-and-neck in global sales, highlighting Toyota's phenomenal growth and the struggles facing GM and other American automakers.

Toyota had said as late as Wednesday that its annual total was 9.37 million vehicles, up 6 percent from 2006. GM said Wednesday in Detroit its global sales had risen 3 percent to 9,369,524 vehicles, making for a race that appeared too close to call.

But Toyota Motor Corp. spokesman Paul Nolasco in Tokyo confirmed the extra digit in Toyota's sales Thursday, showing that GM's total was narrowly higher. GM has been the world's top seller for 77 years.

Toyota executives have repeatedly expressed worries about a possible backlash if they dethrone GM, an American icon. The Japanese automaker has been setting up more plants in North America and has tried to show it's a good U.S. corporate citizen.

Nolasco refused to comment on GM's retention of the No. 1 title. But he said Toyota sees sales growth as a reflection of how people recognize its products "We would like to become No. 1 in quality in product offerings and services, carefully making good products, and give true happiness to our customers," he said.

In Detroit, GM wasn't gloating. The company's global strategy hasn't changed, said company spokesman John McDonald. "We're not as concerned about who's winning," he said. "We're just really focused on what we need to do to have a growing business, getting our business right in North America."

Overall, GM's worldwide sales in 2007 were the second-best in its 100-year history

It's biggest sales growth has come outside the U.S. It set a sales record in China by selling more than a million vehicles, set a record in Brazil with nearly 500,000 and doubled sales in Russia.
Still, GM has struggled in recent years with job cuts, earning losses and plant closures.

Toyota has seized the lead in ecological hybrids with its hit Prius, which runs on a gas engine and electric motor, selling more hybrids than any other automaker. And that edge came at a good time when consumers were looking for good mileage amid soaring gas prices.

Earlier this month, Toyota deposed Ford Motor Co. as the No. 2 auto seller in the U.S. for 2007. Toyota sold 2.6 million vehicles in the U.S. for a 16 percent share of the market -- and more than double from what it sold in 1990.

GM, third on the Fortune 500 list of U.S. corporations, remains the auto sales leader in the U.S. But its market share has dropped dramatically from about 35 percent in 1990 to about 24 percent in 2007. GM sold 3.8 million vehicles in the United States last year.

Aaron Bragman, an analyst with the consulting firm Global Insight, said GM and Toyota have expanded almost evenly in most emerging global markets, but GM has been hurt by sales declines in North America. "A lot of that volume reduction has come here," Bragman said. "They did very well in every other market except North America."

He said much of GM's U.S. sales decline comes as the company has intentionally cut incentives and reduced low-profit sales to rental car companies. GM's U.S. sales last year were down 6 percent from 2006, due largely to a reduction in fleet sales -- those to large, bulk buyers.
"If they had kept that fleet volume up, it wouldn't even be a competition," Bragman said.

Still, it was in new markets such as China that GM still led Toyota, managing to come out ahead for the time being. And the competition in such markets is likely to determine the winner in the long run.

While more mature auto markets, such as the U.S. and Japan, are stagnating, China and India are booming. Toyota, which is aggressively expanding overseas production, is forecasting robust growth for this year at selling 9.85 million vehicles, up 5 percent from this year.
GM does not give comparable sales forecasts.

In a typical comment for a Toyota executive, Shoichiro Toyoda, a member of the founding family and former president, told The Associated Press earlier this month that gaining the top spot in the auto industry could be fleeting. "We are not No. 1," he said. "We need to just keep working harder."

General Motors Corp.: http://www.gm.com

Toyota Motor Corp. http://www.toyota.com