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GM Loses Sales Lead To Toyota

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The Associated Press

Published: July 24, 2008

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 fell 3 percent.

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 in the first six months, although GM eked out a win for the full year, retaining its 77-year position as the world's largest automaker by sales.

Toyota did not release regional sales totals Wednesday, 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 market for trucks and sport utility vehicles, Toyota's U.S. sales fell 6 percent, compared with a 16 percent drop for GM. Industrywide sales fell 10 percent.

"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 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 percent. GM reported exploding sales in emerging markets such as 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 such as the United States and Japan, it predicts industrywide global sales will rise 2.5 percent this year to a new record of 72 million vehicles.

Mike DiGiovanni, GM's director of global market and industry analysis, said GM is struggling in Japan, where consumer confidence is at record lows and sales are at their lowest levels since 1982.

Industrywide sales in Western Europe also fell 7 percent, the result of high fuel prices and falling home values.

Toyota has not been immune to those troubles. Toyota's profit for the January-March quarter sank 28 percent from the previous year as a strengthening yen and lagging North American sales chipped away at the Japanese automaker's earnings.

Toyota 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 percent 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 United States for the first time in 2010.

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