The New York Times-20080124-In Global Race- G-M- Wins by a Day of Pickup Sales

Return to: The_New_York_Times-20080124

In Global Race, G.M. Wins by a Day of Pickup Sales

Full Text (831  words)

It was effectively a tie, but General Motors emerged from last year's hard-fought global sales race with Toyota feeling like the winner.

Most experts assumed that last year would be the end of G.M.'s decades-long domination of the auto industry, when the more nimble Japanese challenger would wrest away the crown and never look back.

Instead, G.M. compensated for another subpar year in the United States with explosive growth in emerging markets in Asia and South America, churning out just enough vehicles to keep Toyota from taking over the top spot.

G.M., which had been No. 1 globally for 76 consecutive years, said on Wednesday that it sold 9,369,524 vehicles last year, a 3 percent increase over 2006. Toyota said Thursday in Tokyo that it had sold 9.366 million, about 6 percent more than in 2006.

In a global market of more than 70 million vehicles, the difference between the two sales numbers, about 3,000, is roughly the number of pickup trucks that G.M. sells each day in the United States.

A tie is a great accomplishment given the scale of the downsizing that G.M. is undergoing, said John Casesa, managing partner of Casesa Strategic Advisers in New York.

It's pretty impressive that they've been able to maintain this type of volume even though the North American market has been under siege, said Mr. Casesa, who called the sales figures another little bit of evidence that this company is reinvigorated.

Shares of G.M. jumped 9 percent Wednesday, closing at $25.70.

G.M.'s sales in the United States were down 6.2 percent in 2007, but 59 percent of its overall sales occurred elsewhere.

Sales increased 74 percent in India, 18 percent in China, 19 percent in Latin America, Africa and the Middle East and 9 percent in Europe.

The company's global total was the second highest in its history, behind the 9.55 million vehicles that it sold in 1978. That record is likely to fall this year, when G.M. celebrates its 100th anniversary and Toyota expects to increase worldwide sales by 5 percent, to roughly 9.8 million. G.M. does not reveal sales targets.

That Toyota hasn't passed them by now is a testament to the great job the company's done in emerging markets, particularly China and Russia, Mr. Casesa said. But it will be very difficult to maintain leadership given the continued market share pressure in North America and the overall slowdown in this market.

Last week, Toyota reported its global sales of 9.37 million, but released a more precise number Thursday after G.M. broke from its typical practice of rounding global sales to the nearest 10,000.

G.M.'s chief sales analyst, Mike DiGiovanni, said G.M. executives did not know Toyota's number, declaring, The race is too close to call.

Executives at both automakers have played down the significance of being No. 1. G.M. says it is more concerned with returning to profitability in North America, while Toyota's culture is one that does not publicly celebrate such milestones.

Our goal is to be No. 1 in quality and No. 1 in customer experience, a Toyota spokesman, Steven Curtis, said.

For G.M., slipping behind Toyota would be a psychological blow as the company continues an overhaul that has included factory closings and tens of thousands of job cuts.

We're very competitive here at G.M., and of course we'd like to win, just like anybody else would, Mr. DiGiovanni said. But what we're really focused on here is running our business for the long term and profitably growing.

G.M. would have remained No. 1 easily had it not intentionally cut back on less-profitable sales to rental car companies; the company made 108,000 fewer such sales in 2007. It also offered fewer discounts to consumers. But Mr. DiGiovanni said G.M. executives were not getting ourselves caught up in just sales numbers and doing unnatural things that got us into trouble, even if that means ceding first place.

In an online chat session this month, G.M.'s chief executive, Rick Wagoner, said: We're staying focused on our plan, great cars, smart marketing, growth in the emerging markets, and hopefully that will keep us on top. If not, we'll come back to work the next day and work even harder.

Toyota outsold G.M. in the first half of 2007, but G.M. pulled back on top after nine months. In the fourth quarter, G.M. said sales rose 4.8 percent.

The two companies are neck and neck in terms of sales but in different worlds financially. Toyota predicted that it would earn a record $14.9 billion profit in 2007, while G.M. lost $38 billion through the first nine months, mostly as a result of a huge accounting charge that it took in the third quarter. G.M. has not said when it plans to announce fourth-quarter earnings.

[Illustration]PHOTO: Toyota dealership in Seattle. Although industry experts expected Toyota to surpass General Motors in global sales in 2007, the two carmakers sold about the same number of cars last year. (PHOTOGRAPH BY ELAINE THOMPSON/ASSOCIATED PRESS)