Toyota tops GM in sales for first time

Toyota Motor Corp. is on course to overtake General Motors Corp. as the world’s biggest automaker after beating the U.S. company in quarterly sales for the first time.

Toyota sold 2.348 million vehicles worldwide between January and March, surpassing the 2.26 million vehicles GM said it sold in the same period, Toyota said yesterday.

The sales figures underscore GM’s struggle to hold on to its 76-year reign as the world’s top automaker.

Toyota’s reputation for quality and fuel efficiency has lifted sales of the popular Camry, Corolla and Prius, while GM cut production of its light trucks and sport utility vehicles as high gasoline prices drove customers away.

Toyota leads in fuel efficiency, new technology, global brand image, cost cutting and employee morale, according to Koji Endo, an industry analyst for the financial firm Credit Suisse in Tokyo.

“Toyota has been a success in almost all the regions and is opening new plants,” Mr. Endo said. “The only region GM continues to be strong is China, and it has failed almost everywhere else.”

The company’s sales in China jumped 32 percent last year to 876,747 vehicles, making it the No. 1 seller there. It also is building a new factory in India, another market with tremendous potential.

GM began a major restructuring in November 2005 that called for cutting costs by closing 12 plants and slashing 30,000 jobs by 2008.

Toyota has beaten GM in profitability for the past four years, with $11.8 billion profit for the fiscal year through March 2006.

Toyota makes Tundra pickup trucks at its new San Antonio factory and is building its seventh North American plant in Ontario, Canada. The company has said it plans to be able to build 2 million vehicles a year in North America by next year, up from about 1.5 million in 2006.

GM, meanwhile, has been negotiating severance packages with thousands of workers as it restructures. In the fourth quarter of 2006, it reported a profit of $950 million, a big turnaround from a loss of $6.6 billion a year ago.

Although painful for the company, the restructuring could poise GM for growth later, said Dave Cole, chairman of the Center for Automotive Research, a nonprofit automotive-industry research group.

“There’s a level of discipline in GM now that’s very, very important in their long-term profitability,” he said.

GM has reduced incentives that turned its customers into seasonal buyers who waited for sales in the fall. It also is putting less emphasis on selling to rental companies.

The incentives and rental companies produced large volumes of auto sales, but few profits, Mr. Cole said.

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