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Toyota Could Pass GM in Sales With 2008 Plan

September 21, 2006|From the Associated Press

TOKYO — Toyota Motor Corp. announced an ambitious plan Wednesday to boost global sales to 9.8 million vehicles in 2008 -- driving home a message of stellar success as its troubled U.S. rivals are closing factories and scaling back production.

The plan shows that Toyota is readying to overtake General Motors Corp. as the No. 1 automaker in annual global vehicle sales. Detroit-based GM sold 9.2 million vehicles worldwide in 2005, the second-largest volume in the company's history. That compares with Toyota's 8.13 million that year.

The Japanese automaker surpassed Ford Motor Co. as the world's No. 2 automaker in 2003.

Soaring oil prices have proved a godsend for Toyota as drivers turn to fuel-efficient cars. Toyota models have a solid reputation for that. They include the Prius hybrid, the Corolla compact and the mid-size Camry, the bestselling car in the U.S. for eight of the last nine years.

In contrast, GM and Ford have long relied on sales of larger vehicles, including pickup trucks and sport utility models, for profits and have suffered with the recent customer shift to small cars.

Toyota said it was set to sell about 8.85 million vehicles worldwide this year, including sales from two subsidiaries: truck maker Hino Motors and small-car specialist Daihatsu Motor Co.

Toyota's share of the American market is growing, mainly at the expense of the U.S. makers, climbing to 15% this year through August, up from 12.9% a year earlier.

"American automakers are in trouble because their products aren't selling," said Shotaro Noguchi, an analyst at Mitsubishi UFJ Securities Co. in Tokyo.

He said Toyota's main challenge would be to keep profitability up as it lifts vehicle sales.

"It's a positive and aggressive plan," he said.

Atsushi Kawai, an analyst at Mizuho Investors Securities, told Dow Jones Newswires that the risks Toyota faced were mostly external, such as a possible slowdown in the Chinese market. Another risk is possible damage from the coup in Thailand, an important manufacturing base for Toyota and other Japanese automakers.

Toyota President Katsuaki Watanabe declined to give a vehicle production target for 2008 but said the number might be slightly higher than the sales figure.

"We are aiming for steady growth through strengthening all our operations," he told reporters at a Tokyo hotel, adding that the manufacturer hoped to strengthen quality control, expand overseas production and cut costs.

According to figures released by GM this month, the company produced 9.05 million autos worldwide in 2005.

GM does not release forecasts for its global vehicle sales but is aware of the serious rivals it faces, spokesman John M. McDonald said Wednesday.

"We respect our competition around the world, and we're realistic about our challenges and opportunities," he said. "We know we have to earn the right to maintain our global sales leadership, and we're doing that day after day."

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