Toyota overtakes GM in Jan-June global sales

Thursday 24th July, 07:15 AM JST

DETROIT —

General Motors Corp, pummeled by falling U.S. sales and high gas prices, lost the global sales lead to Toyota Motor Corp in the first half of this year, but the churning market makes it difficult to predict which automaker will end the year on top.

Toyota sold 4,817,941 vehicles globally during the first six months of the year, company spokesman Hideaki Homma said Wednesday, beating GM by 277,532 vehicles. Toyota said its global sales rose 2 percent from the same period the year before, while GM’s sales fell 3%.

It’s the second time Toyota has beaten GM in sales in the first half of the year. In 2007, Toyota outsold GM by about 50,000 vehicles, although GM eked out a win for the full year, retaining its 77-year position as the world’s largest automaker by sales.

Toyota didn’t release regional sales totals, but the weakened U.S. market appeared to be the biggest battleground. With its reputation for small, fuel-efficient cars and less exposure to the plummeting truck and SUV market, Toyota’s U.S. sales fell 6%, compared with a 16% drop for GM. Industrywide sales fell 10%.

“The U.S. is definitely the sore spot,” said Erich Merkle, an auto analyst with Crowe Chizek and Co., a Grand Rapids accounting and consulting company. “Toyota is not doing not well in SUVs and pickups either, but it’s in a pretty good position in the small car and midsize sedan segments.”

Outside North America, GM’s sales grew 10%. The automaker reported exploding sales in emerging markets like Russia, where sales were up 34% in the second quarter, and China, where sales rose 14%. GM said that despite the tough sales environment in mature markets like the U.S. and Japan, it predicts industrywide global sales will rise 2.5% this year to a new record of 72 million vehicles.

“The growth momentum in emerging markets is still strong,” said Mike DiGiovanni, GM’s executive director of global market and industry analysis.

Still, GM said its gains elsewhere have yet to make up for its losses in North America, where sales fell 20% in the second quarter. The automaker blamed high gas prices, which have caused a steep decline in U.S. truck and SUV sales, as well as a nearly three-month strike at American Axle and Manufacturing Holdings Inc. that shut down much of GM’s production.

In response, GM is closing four North American assembly plants, cutting thousands of jobs, selling assets and suspending its dividend in an effort to raise cash. GM has $24 billion in cash and access to $7 billion in credit but has been burning through about $1 billion per month.

DiGiovanni said GM also struggling in Japan, where consumer confidence is at record lows and sales have hit their lowest levels since 1982. Industrywide sales in Western Europe also fell 7%, the result of high fuel prices and falling home values.

Toyota hasn’t been immune to those troubles. Toyota’s profit for the January-March quarter sank 28% from the previous year as a strengthening yen and lagging North American sales chipped away at the Japanese automaker’s earnings. The company also said it expects sales to drop for the first time in nine years for the fiscal year that ends in March 2009.

Toyota’s U.S. sales also took a surprising 21% dive in June, prompting the company to make major manufacturing changes at its U.S. plants. Toyota plans to suspend truck and SUV production for three months starting in August and will start building the Prius hybrid in the U.S. for the first time in 2010. U.S. Prius sales have fallen in recent months as Toyota has failed to keep up with demand.

Toyota also said last week that its European sales fell 7% in the first half, a dip it vowed to reverse with a series of new, more fuel-efficient products. Merkle said that unlike the U.S., Toyota has a lot of room to grow in Europe.

“They’re finally getting the right product mix there,” he said.

Toyota also is an aggressive player in emerging markets. Last week, it said it is acquiring land in Brazil for a second plant that would start making compact vehicles as early as 2011. GM said its sales in Brazil were up 20% in the second quarter.

Toyota has said it expects to sell 9.85 million vehicles worldwide this year, up 5% from last year. But it may lower that target when it updates its strategy next month. GM doesn’t release full-year sales forecasts.

DiGiovanni said GM now expects the first quarter of 2009 to be the low point of the U.S. housing crisis, and that home prices and auto sales will see some recovery after that. He said oil prices also are starting to show some signs of stability, which could give a big boost to consumer confidence.

“If people see the price stays in some finite range, they feel better about the future,” he said.

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AP Business Writer Yuri Kageyama in Tokyo contributed to this report.

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9 Comments

rajakumar at 11:41 AM JST - 24th July

Way to Toyota/GM, nice competition.
westurn at 06:43 PM JST - 24th July

Isn't this pretty much the same scenerio as last year when Toyota jumped out to an early lead only to squander it away by years end... giving GM it's 77th consecutive year at #1 !!!

Whatever the case, more trustworthy and reliable websites are reporting that GM sales are actually up globally:

"Outside North America, GM's sales grew 10 percent. The automaker reported exploding sales in emerging markets like Russia, where sales were up 34 percent in the second quarter, and China, where sales rose 14 percent. GM said that despite the tough sales environment in mature markets like the U.S. and Japan, it predicts industrywide global sales will rise 2.5 percent this year to a new record of 72 million vehicles."

Wow ! Imagine that, a new record ! And the future kicker is probably going to be China... where I wouldn't be surprised to see US sales soar while Japanese auto makers (with all that historic baggage) do rather poorly. Odd... Toyota doesn't release regional sales figures so it's hard to say whats really happening where. But they (Toyota) have clearly stated that they expect sales to drop for the first time in nine years for the fiscal year that ends in March 2009. So much for the attempted "happy-go-lucky" spin on this here story from Japantoday !
ca1ic0cat at 08:51 PM JST - 24th July

actually it looks like an AP story that was just picked up by JT, so I have no reason to think that a "more trustworthy" website exists. I do agree that GM has a better global position than Toyota but the perception (and possibly factual) of better reliability plus a more fuel efficient model range have given Toyota a leg up in the US. I don't know how things will fare in China. GM seems to have taken a more "local" approach to China that I think the Chinese will appriciate. In the long run this is where the growth will be. I anticipate that the competition will go on with the lead switching for a few more years at least.
westurn at 09:13 PM JST - 24th July

Calicocat... actually the story I'm quoting is off the AP news wire. This other mess was nicked of Kyodo !

Moderator: This story is in fact from the Associated Press.
usaexpat at 11:32 PM JST - 24th July

GM needs to worry about making profits before worrying about how many cars Toyota sells. GM is doing very well in Europe and also China. In Europe GM produces desirable cars under the Opel and Vauxhall brands. In fact Saturn's resurgence in the states is because Saturn is now producing re-branded Opels. Americans have come to expect better levels of fit and finish than what GM traditionally produced. GM is getting with the program and looking towards more fuel efficient cars, I wouldn't count the General out just yet. Of the big 3 GM is probably the most likely candidate to emerge from this round of restructuring as a stronger company. What has hurt GM primarily has been gas prices as they were too reliant on SUVs and large trucks that buyers can no longer afford to feed. So that's my take on GM, Toyota has another problem coming its way, one that GM dealt with in the 80s and that's complacency and deteriorating quality. Toyota has had a series of high profile re-calls as of late (oil sludge, faulty fuel lines etc.) and if they intend to live off their prior reputation for reliability, consumers will eventually call them on it. Toyota needs to re-focus itself on quality before quantity.
westurn at 11:53 PM JST - 24th July

"GM needs to worry about making profits before worrying about how many cars Toyota sells."

Hmmm, being at the top as numero uno for 77 years running leads this cowboy to believe GM doesn't really have much to worry about. So what if they slip a quarter or two, hell even lose the coveted number one slot for the year.. you can't win-em-all all the time ! And looking at fuel prices... they may not want to compete to be number one anymore ! That market is about to be obliterated !
FromEurope at 11:57 PM JST - 24th July

GM has many different brands. If we compare the results only by brand, Toyota is the world's largest brand.

GM brands : Buick · Cadillac · Chevrolet · GMC · Holden · Hummer · Opel · Pontiac · Saab · Saturn · Vauxhall etc...
8iamhappy8 at 01:05 AM JST - 25th July

What'd y'all expect? We're in a global recession started by the US subprime mortgages. Of course US auto manufacturers are gonna suck.
freakashow at 11:11 AM JST - 25th July

http://www.automotoportal.com/article/Top5WorldsMostSuccessfulCarsEver

This is an interesting and honest post about GM:

http://answers.yahoo.com/question/index?qid=20070407184852AAn1Qt4

The older versions of GM were great. Whatever happened to them. Nowadays, the GM models stink and you end up not getting what you pay for.

Year upon year, you see five of the top 20 selling cars (Camry, Corolla, Prius, Tundra, and Rav-4) being Toyota, while Honda has 4 of the top 20 ( Accord, Civic, CR-V, and Odyssey). Nissan pulls in a decent one top-20 finisher (Altima).