The Toyota Motor Corp announced yesterday that it planned to make 9.06 million cars worldwide next year, a goal that could help it snatch from General Motors Corp (GM) the crown of world's largest carmaker, a title GM has held since 1932.
Toyota's springboard would be an expected 9 percent growth in worldwide sales this year, a surge that would help make Japan's largest carmaker the world's most profitable. Toyota expects to make 8.25 million cars worldwide.
GM has not yet forecast its production next year. It has forecast that it will make 9.1 million cars this year, a 2 percent increase over last year. But the race is not over yet. While Americans focus on GM's layoffs and plant closures in the US, GM is planning major expansions in China, part of a wider shift where the American company now makes more cars overseas than at home.
PHOTO: EPA
"I am not sure that it is such a lay up for Toyota," said Kurt Sanger, Japan automotive analyst for Macquarie Securities Japan. "If GM is going to grow 15 percent to 20 percent in China, they are not going to roll over."
While GM loses money, Toyota makes it. In the third quarter that ended Sept. 30, Toyota made US$2.6 billion in net profit, and GM lost US$1.63 billion.
Toyota, armed with its new Texas-made Tundra heavy pickup, hopes to beef up sales in the US heartland, traditionally the bastion of Detroit manufacturers.
Toyota has long been coy about its ambitions to become No.1, preferring to stay out of the limelight as No.2. In 2002, it unveiled a goal of expanding its world market share to 15 percent in 2010, from 10 percent. When analysts noted that the goal would make Toyota the world's largest carmaker, the company stressed that its goal was only an expanded market share.
This year, Toyota's US sales are up 9.9 percent, and it is likely to sell nearly 2.3 million vehicles there next year. The US has been Toyota's largest and most profitable market since 2001.
By contrast, GM, despite deep discounting last summer, has seen its US sales fall 3.7 percent so far this year. GM is expected to sell about 4.2 million cars this year in the US, its biggest market.
Fearful that the top spot will draw unwanted attention from US protectionists, Toyota has started to run ads touting how 63 percent of Toyotas sold in America are made in America. Aiming to raise that to 70 percent, Toyota now has 11 production facilities in North America, three more in the planning stage, and it purchases about US$22 billion in parts and services in the US every year.
"Politically they are a very aware company," Sanger, the analyst said. "And they are aware that passing GM in this political environment is somewhat tricky."
With Toyota opening plants in Texas and Ontario, even Governor Jennifer Granholm of Michigan is courting Toyota in her bid to win a small engine plant.
Toyota's likely rise to the top spot is "one of the reasons we would like to have them in Mich-igan," Granholm said in an interview on Monday. Toyota already has a technical center in Ann Arbor and has announced plans to build a design center in Michigan.
At home, Toyota's car sales are expected to fall slightly this year, by 20,000 units to 1.74 million this year. Despite the fall, Toyota's first in three years, Japan's leading carmaker retains a domestic market share of more than 40 percent. The slight fall was probably the result of lack of new models from April to September.
But as Toyota unveils new models next year, Japan's vehicle sales are expected to inch up. Sales may rise 0.5 percent next year to 5.93 million units, against this year's estimated 5.9 million, the Japan Automobile Manufacturers Assoc-iation, an industry group, predicts.
Meanwhile, Honda Motor Co, said it expected record car and motorcycle sales next year, driven by brisk overseas growth.
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