In what’s shaping up to be the automotive equivalent of Ali-Frazier, Toyota is yet again threatening to defeat General Motors in the fight for the global car sales trophy.
Through the first six months of the year, Toyota Motor Co. sold 4.82 million vehicles, compared with 4.54 million for General Motors Corp., a 280,000-car gap.
Last year, GM also trailed Toyota at the halfway mark but won by the slimmest of margins -- fewer than 4,000 cars and trucks for all of 2007.
This year, however, it appears increasingly likely that GM will for the first time cede its title, as soaring gas prices, sagging consumer confidence and an over-reliance on sport-utility vehicles and trucks hurt it in its most important market: home.
“I believe that this is the year Toyota finally takes the sales lead,” said Dennis Virag, president of the Automotive Consulting Group in Ann Arbor, Mich. “Looking at the companies, at their strategies and portfolios, Toyota is just in a much stronger position than GM.”
Although GM showed 10% year-over-year sales gains in the second quarter in its international markets, including a total increase of 20% across Brazil, Russia, India and China, it was down 20% in North America, which includes Mexico and Canada. The result was a 5% global sales decline for the quarter, and a 3% drop since Jan. 1.
“There was not quite enough volume . . . in those emerging markets to offset weakness in North America, more specifically the U.S. market,” said Michael DiGiovanni, GM’s executive director of industry analysis.
He added that “early indications are that [July] is going to be another challenging month” in the U.S. Toyota saw its total sales increase 2.3% for the first six months of the year and 2% in the second quarter, when oil prices surged and sent U.S. gasoline prices over $4 a gallon.
Unlike GM, Toyota has a mix of vehicles favoring the smaller, fuel-conserving cars that U.S. consumers now prefer over trucks. Through June, 59% of the vehicles the Japanese automaker sold in the U.S. were cars, compared with 40% for GM.
In trading Wednesday, GM shares rose 30 cents, or 2.1%, to $14.62. Toyota’s shares fell 95 cents, or 1%, to $91.92.
With overall truck and SUV sales down 18% this year in the U.S., the entire industry has moved to shift product mix. Nearly all carmakers have faced shortages of small cars as consumers snap them up and bigger vehicles pile up on lots.
GM last month said it would move to cut annual truck production by 700,000, and Toyota said it would cease production of Tundra pickups and Sequoia large SUVs for three months to keep inventories low. Both GM and Ford Motor Co. have announced plans to ramp up production of smaller cars while introducing new fuel-efficient models.
Although overall sales have been down in the U.S., Japan and Western Europe, most of the rest of the world is up. That’s good news for GM, which sold 65% of its vehicles outside the country in the second quarter.
In the second quarter, overall worldwide sales for all carmakers reached 18.5 million, which puts the global market on pace to sell 72 million cars this year, an increase of 2.5%, or 1.7 million cars and trucks, according to GM.
Unfortunately for GM, Toyota is aggressively moving to gain market share in developing markets as well, showing large sales gains in China this year. Toyota this month announced plans to build a factory in Brazil.
More troubling for GM may be the way Toyota has increased its market share in the U.S. In 2003, Toyota held 11.2% of the market, compared with GM’s 28%. Through June of this year, GM’s share has slipped to 22.8%, and Toyota controls 16.1%.
“We’re eventually going to see Toyota fight GM for the U.S. sales lead as well,” Virag said.