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GM Hangs on as World's No. 1 Automaker

Toyota tussles with environmentalists, loses key Consumer Reports endorsement

By Joe Benton
ConsumerAffairs.com

October 22, 2007

Toyota worldwide sales grew 7 percent from January to September to 7.05 million vehicles while GM reported sales of 7.06 million vehicles, which was a 2 percent rise for the period.

The GM sales numbers include vehicles built in a joint venture in China in which GM holds a minority stake, cars that some industry analysts do not count.

Toyota's global quarterly figures include sales of its Daihatsu minicar and Hino truck divisions.

GM, which lost more than $12 billion in the past two years, is in the middle of a restructuring that includes cutting more than 34,000 jobs and closing 12 plants in North America.

Toyota is on its way to another year of record profits, aided by increasing sales in Europe, China and other emerging markets.

Toyota's troubles

Toyota, however, has paid a price for its expansion. The automaker is in an ongoing squabble with environmentalists who accuse the Japanese company of hypocrisy because of its lobbying for a milder version of the U.S. mileage bills now before Congress.

Toyota also has dropped from first to third place in the latest vehicle ratings put out by Consumer Reports magazine. Consumer Reports also withdrew its "buy" recommendations for three key Toyota models. They are the four-wheel-drive V-8 Toyota Tundra pickup, the all-wheel-drive version of the Lexus GS sedan, and the V-6 powered Toyota Camry.

GM said sales of its Chevrolet brand and the Opel Corsa compact cars helped keep the company ahead of Toyota by about 10,000 units.

GM also reported that strong sales in emerging markets like Brazil, Russia and China contributed to the company’s 4 percent sales increase in the third quarter ending September 30.

GM has been the largest automaker in the world for 76 years but many analysts predict it is a matter of time before the Japanese automaker will surpass GM.

More than cars

The race is about more than the number of cars people are buying.

GM's profitability falls short of Toyota, which is rich in cash to invest in technology research and model development.

Toyota is the most profitable of all automakers on a per-vehicle basis. The Japanese automaker increased its profit per vehicle from $1,175 in 2005 to $1,977 in 2006, according to the company report.

GM is still losing money for every vehicle sold in North America but lowered that loss to $146 in 2006 from $1,271 in 2005, mostly because of cost reductions, including thousands of job cuts, according to the automaker.

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