Toyota Outsells GM Worldwide in First Half 2008

• SEE ALSO: October 2005 Editorial - What Gives?

But First Snide's Remarks: Congratulations to our friends at Toyota...you are offering the world the cars and trucks that buyer's are buying.

The big Oops is for the "leaders" of what were once the world's leading builders and suppliers of cars and trucks, who are individually great folks but collectively failures, proven by the results of their actions which have been more than wrong...hey guys do what's right and step aside and let others do what is necessary to stop the North American auto industry's slide into oblivion...I'm sure your Golden Parachutes will protect your way of life.. while your actions and bad decisions continue to ruin the lives of your employees and our economy as a whole. What do you think - msnide@theautochannel.com

DETROIT July 23, 2008; Dee-Ann Durbin writing for the AP reported that General Motors Corp., pummeled by falling U.S. sales and high gas prices, lost the global sales lead to Toyota Motor Corp. in the first half of this year, but the churning market makes it difficult to predict which automaker will end the year on top.

Toyota sold 4,817,941 vehicles globally during the first six months of the year, company spokesman Hideaki Homma said Wednesday, beating GM by 277,532 vehicles. Toyota said its global sales rose 2 percent from the same period the year before, while GM's sales fell 3 percent.

It's the second time Toyota has beaten GM in sales in the first half of the year. In 2007, Toyota outsold GM by about 50,000 vehicles, although GM eked out a win for the full year, retaining its 77-year position as the world's largest automaker by sales.

Toyota didn't release regional sales totals, but the weakened U.S. market appeared to be the biggest battleground. With its reputation for small, fuel-efficient cars and less exposure to the plummeting truck and SUV market, Toyota's U.S. sales fell 6 percent, compared with a 16 percent drop for GM. Industrywide sales fell 10 percent.

"The U.S. is definitely the sore spot," said Erich Merkle, an auto analyst with Crowe Chizek and Co., a Grand Rapids accounting and consulting company. "Toyota is not doing not well in SUVs and pickups either, but it's in a pretty good position in the small car and midsize sedan segments."

Outside North America, GM's sales grew 10 percent. The automaker reported exploding sales in emerging markets like Russia, where sales were up 34 percent in the second quarter, and China, where sales rose 14 percent. GM said that despite the tough sales environment in mature markets like the U.S. and Japan, it predicts industrywide global sales will rise 2.5 percent this year to a new record of 72 million vehicles.

"The growth momentum in emerging markets is still strong," said Mike DiGiovanni, GM's executive director of global market and industry analysis.

Investors shared that optimism, pushing GM shares up 14 percent before they tapered off later in the day. GM shares rose 30 cents, or 2.1 percent, to $14.62 in Wednesday trading. Toyota's U.S. shares fell 95 cents to $91.92.

Still, GM said its gains elsewhere have yet to make up for its losses in North America, where sales fell 20 percent in the second quarter. The automaker blamed high gas prices, which have caused a steep decline in U.S. truck and SUV sales, as well as a nearly three-month strike at American Axle and Manufacturing Holdings Inc. that shut down much of GM's production.

In response, GM is closing four North American assembly plants, cutting thousands of jobs, selling assets and suspending its dividend in an effort to raise cash. GM has $24 billion in cash and access to $7 billion in credit but has been burning through about $1 billion per month.

DiGiovanni said GM also is struggling in Japan, where consumer confidence is at record lows and sales have hit their lowest levels since 1982. Industrywide sales in Western Europe also fell 7 percent, the result of high fuel prices and falling home values.

Toyota hasn't been immune to those troubles. Toyota's profit for the January-March quarter sank 28 percent from the previous year as a strengthening yen and lagging North American sales chipped away at the Japanese automaker's earnings. The company also said it expects sales to drop for the first time in nine years for the fiscal year that ends in March 2009.

Toyota's U.S. sales also took a surprising 21 percent dive in June, prompting the company to make major manufacturing changes at its U.S. plants. Toyota plans to suspend truck and SUV production for three months starting in August and will start building the Prius hybrid in the U.S. for the first time in 2010. U.S. Prius sales have fallen in recent months as Toyota has failed to keep up with demand.

Toyota also said last week that its European sales fell 7 percent in the first half, a dip it vowed to reverse with a series of new, more fuel-efficient products. Merkle said that unlike the U.S., Toyota has a lot of room to grow in Europe.

"They're finally getting the right product mix there," he said.

Toyota also is an aggressive player in emerging markets. Last week, it said it is acquiring land in Brazil for a second plant that would start making compact vehicles as early as 2011. GM said its sales in Brazil were up 20 percent in the second quarter.

Toyota has said it expects to sell 9.85 million vehicles worldwide this year, up 5 percent from last year. But it may lower that target when it updates its strategy next month. GM doesn't release full-year sales forecasts.

DiGiovanni said GM now expects the first quarter of 2009 to be the low point of the U.S. housing crisis, and that home prices and auto sales will see some recovery after that. He said oil prices also are starting to show some signs of stability, which could give a big boost to consumer confidence.

"If people see the price stays in some finite range, they feel better about the future," he said.

AP Business Writer Yuri Kageyama in Tokyo contributed to this report.