Toyota Could Be Number One in Sales

January 2, 2008
2007 Toyota Tundra CrewMax

2007 Toyota Tundra CrewMax

General Motors’ 76-year reign as the world's largest automaker could come to end this week as the final numbers for 2007 are tallied up around the world.By the time all the sales are totaled, Toyota Motor estimates it will have sold 9.36 million vehicles worldwide during 2007. Meanwhile, GM’s total sales are expected to come in at around 9.3 million units even though GM has become the first automaker to sell one million vehicles in China.

Toyota had led GM through the first half of 2007 but GM narrowly took the lead back during the third quarter thanks to strong sales in Asia. However, GM's continuing difficulties in North America, where its sales have slipped during the first eleven months of the year, appear to have allowed Toyota to move into first place.

In addition, Toyota, which is by far the world's richest automaker, is in the midst of a systematic expansion that began as the Japanese automaker laid out a plan to overtake GM as the world's number-one vehicle builder.

At this point, even if GM managed to hang on to the sales lead in 2007, Toyota said it is planning to sell 9.85 million vehicles in 2008. GM has not made any forecast for 2008 but even with another healthy gain in China it is doubtful GM can match Toyota's projection.

GM’s chances of holding off Toyota's charge diminished significantly in early December when Renault/Nissan stepped in and beat out GM in a deal for AvtoVaz, Russia's largest carmaker. The acquisition of AvtoVaz, with its sales networks stretching deep into the hinterlands of the former Soviet empire, could have given GM some additional breathing room in its duel with Toyota by adding several hundred thousand units to GM's global sales totals. GM and Renault/Nissan also could wind up competing again as Serbia auctions off its state-owned automobile company.

In the U.S., Toyota executives are talking about increasing sales by about one percent while GM's sales are expected to be essentially flat or to decline slightly, since forecasters believe the extended housing crunch in the U.S. will continue to undercut the pickup truck sales on which GM is dependent.

Meanwhile, Toyota is pushing into the Russian market for the first time in a significant way, opening an assembly plant on the outskirts of St. Petersburg, which has become a production center for international automakers operating in Russia. The $200 million plant will employ 600 workers and will produce 20,000 cars a year in the initial phase and later increase its output to 50,000, Toyota President Katsuaki Watanabe said. Watanabe said production could eventually reach 200,000 cars a year.

Several foreign automakers have based operations in St. Petersburg, as Russia's former imperial capital has provided tax breaks and infrastructure and has cast itself as a gateway for international trade.

One sign of Toyota’s continuing aggressiveness are its plans for an elaborate new dealership in the German capital of Berlin. Once it’s completed, the new Toyota dealership is expected to be bigger than those operated by Mercedes-Benz, BMW, and Volkswagen, according to reports in the German press.

Overall, Toyota credits its continuing growth to strong demand for smaller, fuel-efficient models such as the Camry sedan, Corolla compact, and Prius gas-electric hybrid.

 --Joseph Szczesny

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