Sales race heats up for Toyota, GM
Monday, 28 January 2008

Asia News Network . Tokyo

The Toyota Motor Corp and the General Motors Corp of the United States are neck and neck in the race for the title of world's biggest automaker by sales, with GM just barely holding onto top spot in 2007.

The key for Toyota in attempting to overtake GM seems to lie in the company's efforts to bolster sales at home and in emerging markets such as China and India that are showing rapid growth.

Toyota's global vehicle sales were less than 5 million in 1997, when GM was selling more than 8.5 million cars annually. 'Back then, nobody expected (Toyota to match GM) in 10 years,' a Toyota executive said.

Toyota has caught up with GM mainly because it successfully expanded sales in GM's stronghold, the North American market, while simultaneously expanding its domestic market share.

Toyota has increased its annual global sales by about 3.6 million units over 10 years. Of the increase, about 1.46 million is accounted for by the North American market—Toyota's fastest growing market. In the United States, Toyota overtook Ford Motor Co to grab second spot in 2007.

Toyota's success has been built on a reputation for high-quality and economical cars. It also had success in getting offshore production into full gear and introducing hybrid cars, while the rising price of gasoline has served as a tailwind for sales of its fuel-efficient vehicles.

Meanwhile, GM has seen annual sales fall by almost 1 million units in the United States over the same period, forcing the company to make large cuts to its workforce. The decline came as the company failed to respond to consumers' growing disenchantment with large, gas-guzzling vehicles.

At one time, GM was part of a business tie-up with three Japanese automakers including Suzuki Motor Corp, with all the firms coming under the GM group umbrella. But the tie-up failed to halt Toyota's momentum in either North America or Japan. GM Chairman Richard Wagoner says the company is leading Toyota in many regions, though not in Japan.

Toyota's breakthrough is partly due to strategic blunders by European and US automakers, which engaged in repeated consolidation and repositioning as part of attempted business expansion.

DaimlerChrysler AG, which was formed in 1998 through a merger of Germany's Daimler-Benz AG and Chrysler Corp of the United States, split up when the German company sold off the Chrysler unit last year.

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