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GM, Toyota Locked in Dead Heat


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With both makers now reporting their year-end sales numbers, it appears that General Motors and Toyota wrapped up the 2007 sales sweepstakes in a global dead heat.

In a release issued Wednesday, GM revealed it had sold 9,369,524 cars, trucks and crossovers worldwide. In rounded numbers, that would work out to a tie with the 9.37 million vehicles Toyota reported selling worldwide, earlier in the month. The Japanese maker has not provided a down-to-the-vehicle total, so it’s hard to tell whether it actually has grabbed the global sales crown that its U.S. rival has held for the last 67 years.

“The race is too close to call,” confessed Mike DiGiovanni, GM's chief industry analyst, during a conference call with outside analysts and reporters. “I don't think anybody knows at this point.”

On the whole, it was a good year for General Motors, despite the continued decline in its home market, where its share slipped to just 23.8 percent in 2007. At its peak, in the 1960s, the General controlled more than half the U.S. market. Total sales were second-best in the company’s history and marked only the fourth time ever GM had pushed past 9 million worldwide, largely due to a surge in such emerging markets as China, India and Russia.

Toyota has also targeted the new automotive markets, though it has generally had a slower start, particularly in China, where it has had to overcome longstanding enmity largely stemming from the Second World War. In the U.S., however, The Japanese maker has been going gangbusters, with its 2007 market share, at 16.3 percent, more than double what it held as recently as 1990.

Now, gaining traction almost everywhere, Toyota is projecting another five percent growth, in 2008. It recently announced plans to boost production to 9.85 million this year. And while GM officials are refusing to publicly reveal their own 2008 targets, most observers believe that the odds are quite high that Toyota will strip the American maker of its hold on the number-one spot, for the first time since 1931, when it nudged past struggling Ford Motor Co.

While it may matter to sports teams, it isn’t clear, however, that being number one means anything in the auto business. “It matters to you folks,” meaning reporters, suggested GM CEO Rick Wagoner, during an interview at the Detroit Auto Show, “but I don’t know if it matters to anyone else.”

If anything, added GM Vice Chairman Bob Lutz, during another interview, “There’s a certain benefit to the internal culture to being number two.” There seems little doubt that in recent years, as it has seen its sales and shares slip, while watching Toyota catch up in the rearview mirror, GM employees, from the shop floor to senior management, have become increasingly motivated to fix nagging, chronic problems.

To get there, they still must fix their core North American operations, improve still-troubled Europe – and continue to gain ground overseas. As things have begun to turn around, North America has come to account for a steadily dwindling share of GM’s sales and revenues. Not that many years ago, Lutz noted, the U.S. and Canada accounted for 75 percent of GM’s vehicle tally, a figure now down to 50 percent. And early in the next decade, that is likely to drop as low as 25 percent.

As for Toyota, the company’s leaders are painfully aware of the price for gloating, especially during an economic downturn. In the 1980s, with U.S. automakers reporting multi-billion dollar losses, the Japanese were forced to accept “voluntary” sales restraints. But that ultimately backfired on Detroit, leading Toyota and other Asian makers to set up production operations in the U.S. Today, Toyota plants scattered across the continent build more than half the vehicles it sells here.


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