Despite slump, Toyota outsells GM worldwide for first time

Visitors to Toyota Motor Corp.'s gallery in Tokyo look at the carmaking giant's latest models. Toyota hopes visits to its showrooms translate into more customers; Toyota's overall global sales fell 4 percent for 2008, marking that automaker's first decline in a decade. But for the year Toyota sold more vehicles worldwide than did GM.

NEW YORK - Japan's Toyota Motor Corp. sold more cars and trucks last year than General Motors Corp., stripping the Detroit automaker of the No. 1 global sales crown.

It marked the first time since the Great Depression that GM cannot call itself the world's largest automaker and came in a year for which GM celebrated its 100th anniversary and narrowly avoided a bankruptcy filing amid a significant downturn in the economy.

GM said yesterday it sold 8,355,947 cars and trucks around the world in 2008, falling about 616,000 vehicles short of the 8.972 million Toyota announced Tuesday.

Toyota's move into the top sales spot wasn't a huge surprise. The automaker nearly topped GM in 2007, selling only about 3,000 fewer vehicles than the U.S. company did that year.

Mike DiGiovanni, GM's executive director of global market and industry analysis, downplayed the significance of the drop to No. 2, saying that the automaker is focused on profitability rather than sales volume.

"I don't think being No. 1 in vehicle sales means much at all to the American consumer," Mr. DiGiovanni said. "I think what matters most to the consumer is strong brands and strong products. And the key thing right now with what the industry is going through now is viability and profitability."

Mr. DiGiovanni said all automakers are currently facing risks and challenges that have not been seen since the Great Depression, and he pointed out that even Toyota expects to post an operating loss for the current fiscal year - the Japanese automaker's first in 70 years.

GM had been the largest carmaker since 1931, two years before Toyota began making cars in Japan.

Toyota's overall global sales fell 4 percent for the year, marking that automaker's first decline in a decade.

The Japanese automaker has cut back production in both North America and Japan in order to align its product offerings with slowing consumer demand.

GM posted an 11 percent drop in global sales for the year, which it linked to the steep drop in vehicle demand in its key North American and European markets. North American sales dropped 21 percent for the year. GM Europe sales fell 6.5 percent.

Mr. DiGiovanni said Toyota's move to the top of sales rankings doesn't necessarily signal a turning point in the industry. He said it's entirely possible that GM could regain the No. 1 spot once U.S. and European markets recover and sales pick up in key emerging markets.

But first GM has to figure out how to survive long enough to take back its crown.

The struggling automaker, which has closed plants and laid off workers to cut production as it faces the worst U.S. auto market in more than 25 years, received a $13.4 billion lifeline from the federal government last month.

However, the bailout engineered by the former administration requires GM to achieve "viability" by March 31.

The loan may be called back if the government determines GM hasn't met that goal. GM shares fell 29 cents, or 8.3 percent, to $3.21 in midday trading, while Toyota's U.S. shares slipped 5 cents to $65.83.