Toyota Tops General Motors
April 24, 2007
Toyota became the world’s No. 1 car company for sales for the first three months of this year. Toyota surpassed General Motors, the world leader for 76 years, for the first time.
While the figures announced today represent only quarterly sales results, they may well foreshadow the inevitable: Toyota will become No. 1 as early as this year.
Toyota has claimed that surpassing GM is not its goal, Toyota president Katsuaki Watanabe told reporters in December. “It will only be a result of what we've been doing,'' he said.
But don’t believe for a second Toyota’s goal -- or Watanabe's goal -- isn’t to surpass GM. Toyota desperately wants to be No. 1. Watanabe -- described as sharp, very aggressive and even a bit arrogant -- wants Toyota to be No. 1. The automaker just worries about what goes along with being No. 1.
And being No. 1 is tough. Just ask GM.
No. 1 Toyota Predicted
“This was not an unexpected turn of events," said Edmunds.com Senior Analyst Jesse Toprak. "But it happened a bit earlier than forecasted because of GM’s decision to cut fleet sales. GM wasn’t making much money on those cars anyway, so the financial picture isn’t dramatically different than before.
"All GM sacrificed in this decision was ego," added Toprak, "since the executives knew Toyota would become number one sooner when much of GM’s fleet sales were removed from the count.”
What No. 1 Means
What stealthy Toyota is finding is that being No. 1 means being under the microscope instead of under the radar screen.
Indeed, the sands already have been shifting slightly for Toyota in the U.S. The automaker, which has encountered public relations disasters and quality problems, has been scrutinized more in the past year than ever. Toyota and the Japanese government fear political backlash and that they will be blamed for the deterioration of the condition of Detroit automakers.
The March to No. 1
But Toyota plans to march on.
Toyota sold 2.348 million vehicles worldwide in the January-March quarter, largely on the strength of Camry and Corolla sales. GM, which has been the world’s largest automaker for 76 years, sold 2.26 million vehicles during the same period.
In the U.S., Toyota's sales rose 12.9 percent last year, prompting it to surpass Chrysler as No. 3 in sales. Toyota's U.S. share climbed to 16 percent in March, behind GM's 22 percent and Ford's 17 percent.
In terms of production, Toyota's "global master plan," leaked to the news media last year, calls for Toyota to capture 15 percent of the world car market by 2010. This year, Toyota’s forecasted global production is 9.42 million vehicles and sales of 9.34 million.
GM has not released a forecast, but is boosting overseas production that could allow it to hold onto the No. 1 spot for production for now. GM officials were quick to point out that a quarter does not make a trend.
Posted by Michelle Krebs at 6:06 AM under Commentary , Featured , GM , News , Toyota | Comments (4) | digg this | Seed Newsvine
Did Toyota win the contest, or did GM lose it? More than a little of both, certainly, but I think GM lost the position even more than Toyota gained it.
This isn't the first place I've read that Toyota will now have to face the media burden of being #1. Sorry, but I just don't buy that this is among GM's top 100 problems.
I also don't think the widely discussed Toyota recalls will significantly harm its rep. The sludge issue was much more of a threat. Loyalty is broken not by recalls but by having to foot large repair bills before 100,000 miles. Toyota wised up in the sludge case.
For more detail, I posted about the recall "problem" and Toyota becoming #1 in my own blog today:
http://www.truedelta.com/blog
Posted by: Michael Karesh | April 24, 2007 at 7:42 AM
GM has been coasting along like a stoned turtle for 3 decades. I really believe GM managment was turning a blind cheek to the threat of Toyota and the imports in general catching up to them. That, and they counted too much on the big stuff paying the bills (Full size trucks and SUV's)
Meanwhile, 800 thousand people a year are buying up the 20 grand Camry's and Corolla's with minimal incentives, in a segment that dominates the landscape. Poor decision on GM's part to ignore this for so many years.
Posted by: Scott | May 04, 2007 at 10:12 PM
Who doesn't want to beat GM?! Every automaker has that thing in mind if they have the ability to beat GM, maker of the best cars and parts like GMC tailgate handle- www.wholesalegparts.com/gmc-tailgate-handle/ -I just don't believe that it had not came to Toyota's mind to become the World's largest Automaker. It's still too early to tell since the year is still on its half. If GM will strive hard, they can still get the No.1 spot. Just extra effort is needed!
Posted by: mazbee | May 31, 2007 at 10:50 PM
More important than GM's size or sales ranking is whether GM will learn from experience, including the experience of its former customers.
With one exception, I gave up on buying US-brand cars after my first Japan-made Toyota. Currently I have a US-made Toyota, a Japan-made Nissan and a Canada-made Dodge (my final US-brand car). There just isn't any comparison on quality, durability, reliability, fuel economy and long-term maintenance costs -- these and the other Japanese cars I've owned are much better than the US-brand cars, with my US-made Toyota being the best of all.
As other articles have pointed out, the Japanese automakers, especially Toyota, have relentlessly focused on improving quality and fuel economy in the models they do have, and positioning themselves to have models that the public will want in the coming years.
I guess that one of the factors Toyota has consistently planned for in "the coming years" has, for some time, been rising fuel prices. We can't say that about GM, can we? They've focused on models that bring high profit margins now -- SUVs. But the idea that fuel prices would rise in the US must have just been a wild guess on Toyota's part, no? We really can't blame GM for not foreseeing it and preparing for it. After all, we've never had a similar sustained and sudden spike in fuel prices, have we? (For any who can't detect sarcasm in the printed word, that was sarcastic.)
Anyone alive and aware in 1973 and 1979 will remember the oil embargoes and that when gas prices suddenly rose sharply and did not come back down, large numbers of Americans switched to smaller, fuel-efficient cars, mostly Japanese cars and VW -- US automakers had very few to sell. And those buyers didn't come back to GM, for all the reasons that still set Toyota cars apart from GM's.
Fuel prices can rise without an embargo, as evidenced by increases since 2005. GM wasn't prepared for fuel price increases in 1973, and it isn't very well prepared now. That, and its overall inferior quality as compared with Japanese cars, will inevitably lose GM even more US market share. (GM doesn't even appear to care about competing with Toyota worldwide -- for example, go look at what they're trying to sell in Japan: luxury cars! A clear admission by GM that its economy cars aren't competitive). GM hasn't learned from the past, and I have no sympathy for it whatsoever.
I can't blame the unions, not entirely anyway. We have unions because of chronic and widespread poor decisions and abuses by management in the distant past. In the absence of unions, today's management might behave in the same ways (to the extent permitted by law): firing anyone who falls ill, providing unsafe working conditions, requiring unreasonably long working hours, eliminating health benefits. After all, when profits decline management always seeks in its negotiations with the unions to reduce these benefits and increase its flexibility to "manage" the workforce. So we still need unions and the unions have to focus on protecting these benefits, because it is clear that they are not "givens" and might disappear if management had its way. It's different in Japan. Healthcare is provided by the national government, for example. There, management seems to genuinely feel a responsibility to ensure the welfare of its workers and management isn't so focused on cutting costs at the expense of the workers, and the unions are more focused on helping increase quality and productivity by improving conditions for workers (as opposed to just improving conditions for its own sake).
All these points were well-known and thoroughly discussed and even widely taught in college in the US in the mid-1970s. GM has had all this time to move itself closer to the "Toyota model," if you will, but sorry to say the time has been wasted.
Posted by: jim | December 25, 2007 at 7:19 AM