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Toyota in line to pass GM for No. 1 spot


Aiming high: Toyota Motor Corp. President Katsuaki Watanabe announced the production target Tuesday in Nagoya, Japan.

Toyota in line to pass GM for No. 1 spot
Japan's largest carmaker set to top 9 million vehicles in '06
By James Brooke
The New York Times
December 21, 2005

NAGOYA, Japan -- Toyota Motor Corp. announced Tuesday that it plans to make 9.06 million cars worldwide in 2006, a goal that could help it snatch from General Motors 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 -- which employs 4,300 at a plant in Princeton, Ind. -- expects to make 8.25 million cars worldwide this year.

GM has not forecast its 2006 production. It has predicted it will make 9.1 million cars in 2005, a 2 percent increase over last year. The race is not over yet. While Americans focus on GM's layoffs and plant closures in the United States, GM is planning major expansions in China, part of a wider shift in which the American company now makes more cars overseas than at home.

"I am not sure that it is such a layup for Toyota," said Kurt Sanger, Japan automotive analyst for Macquarie Securities Japan. "If GM is going to grow 15 to 20 percent in China, they are not going to roll over."

While GM loses money, Toyota makes it. In the third quarter, Toyota made $2.6 billion in net profit and GM lost $1.63 billion.

Toyota hopes to beef up sales in the American heartland, traditionally the bastion of Detroit manufacturers.
Toyota long has 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 American sales are up 9.9 percent, and it is likely to sell nearly 2.3 million vehicles in the United States in 2005. The United States has been Toyota's largest and most profitable market since 2001.

By contrast, GM, despite deep discounting last summer, has seen its American sales fall 3.7 percent so far in 2005. GM is expected to sell about 4.2 million cars this year in the United States, its biggest market.

Fearful that the top spot will draw unwanted attention from American 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 and three others in the planning stage; it purchases about $22 billion in parts and services in the United States every year.


LINK: http://www.indystar.com/apps/pbcs.dll/article?AID=/20051221/BUSINESS/512210375