The Wall Street Journal-20080124-GM Hangs On to Top Sales Spot Over Toyota
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GM Hangs On to Top Sales Spot Over Toyota
General Motors Corp. gets to keep its title as the world's No. 1 auto maker for at least one more year.
The Detroit auto maker said yesterday that its global vehicle sales rose 3% in 2007 to 9,369,524 cars and trucks. With that total, GM barely squeezed by rival Toyota Motor Corp., which said it sold 9.366 million vehicles. The tight margin suggests the two will continue to battle it out for No. 1, with GM enjoying strong international growth even as it cuts back in the U.S.
GM has been the world's largest auto maker by sales for the last 76 years. But amid a series of significant losses and a turnaround effort in North America that has yet to show much bottom-line success, Chairman and Chief Executive Rick Wagoner has had to focus on the struggle to return to profitability over the sales race with Toyota.
In an interview last week, Chief Financial Officer Fritz Henderson said GM is focused on profitable growth, adding that investors "would kill us if they thought we were trying to win" the race for No. 1.
Toyota has relied on a steady stream of new products and a weak Japanese currency to rack up tens of billions of dollars in profits in recent years. GM, meanwhile, has lost tens of billions since 2005 as a result of restructuring charges, disappointing results in North America, high labor costs and tax-related losses.
Mr. Wagoner has slashed billions of dollars in fixed costs and expects to realize an additional $5 billion in cost cuts and improved profitability by 2011, stemming from GM's new labor contract. But to generate sustainable profits at a healthy level, GM may have to put more emphasis on sales growth, especially in its core North American operations.
GM was able to increase global vehicle sales last year because of strong growth in emerging markets, including Russia and China.
David Healy, an auto analyst at Burnham Securities, said GM is "probably keeping pace with Toyota currently everywhere around the world except in the U.S.," while Toyota appears to be slowing its growth pace to stop some recent slip-ups in quality. "These two might be slugging it out for quite awhile," he said.
In North America, which accounts for 48% of GM's total sales, vehicles sales declined 6.1% to 4.5 million vehicles. China, now GM's second-largest market after the U.S., accounted for sales of more than one million vehicles for the first time.
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Kevin Kingsbury, Norihiko Shirouzu and Yoshio Takahashi contributed to this article.
