Toyota to Drive Past GM on Total Vehicle Sales

Toyota (TM) Motor Corp., long lurking in the wings to snatch and keep the title of the world’s biggest automaker from rival General Motors (GM), might get there even sooner than expected.

Toyota’s forecast for 2008 is an impressive global sale of 9.85 million vehicles next year, up 5.2% from the 9.36 million it has targeted for 2007. Earlier this year, GM had announced that it would increase 2008 production by 1% to 9.26 million vehicles. If Toyota does live up to its upbeat forecast, it will not only extend its expected lead over GM, but the gaudy figure will mark the single best year on record for sales, surpassing the 9.55 million cars and trucks GM sold 30 years ago.

Toyota is also tracking to put an end to GM’s 70-plus year run this year as the biggest car seller worldwide. The race has been too close to call for much of 2007 with the two companies trading the lead back and forth.

Through November, Toyota sold 2.40 million cars and trucks in the U.S., a 3.2% increase from a year earlier. Meanwhile, GM has seen its vehicle sales drop 6.3% in the U.S., but it still holds a significant lead at 3.54 million cars and trucks. Ford (F), having already surrendered its runner-up spot, sold 2.36 million vehicles through 11 months, down 12.1% from 2006.

While the shake-up of the automotive hierarchy has been practically a foregone conclusion for years, if not decades, Toyota’s swift ascent appears to be accelerating amid a deepening crisis in the U.S. mortgage market, a slump in home construction, and signs that high gasoline prices are not going to relinquish their lofty perch any time soon.

Toyota will feel the pinch in the U.S., but with a bigger global footprint and a lineup consisting mostly of fuel-efficient smaller cars, the company is better equipped to handle a slump in the key North American market than Detroit giant GM.

According to The Wall Street Journal, “Katsuaki Watanabe, Toyota’s president, said the company aims to achieve its bold sales targets by expanding in fast-growing emerging markets.” This means that Toyota will have to do well in growing markets like China and hold its own in the U.S.

But Toyota could be tripped up on its way to the record. The market in China is becoming much more competitive. Local companies like SAIC are trying to take market share from companies based outside the world’s most populated country.

In the U.S., Toyota hopes its sales can stay close to flat. But some predictions are that the car market here will drop from just over 16 million cars sold in 2007 to 15 million in 2008. In that case, Toyota may have a very difficult time meeting its U.S. targets, especially if GM and Ford begin to offer big discounts to lower inventories.

Also, car sales have been very weak in Toyota’s home market of Japan. It is possible that Toyota could lose ground there, which may undercut its production plan.

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