Toyota Set to Overtake GM as World’s Largest Automaker
It wasn't so long ago that pundits were predicting Toyota would be bigger than GM by 2010. Now it appears the Japanese automaker could be the world's largest by the end of 2006. Toyota has just announced plans to increase 2006 production of all its brands to 9.06 million units, just short of GM's 9.1 million units in 2005. So the General may still hold the title this time next year but if sales in North America continue to fall, Toyota may be numero uno. Either way, it's almost certain to take the title by 2007.
Trouble is, bad news only makes prospective buyers uncertain. Couple this with the continuing drop in GM share prices and you have a situation where people wonder what's happening with the company and may become reluctant to buy its products. More unsettling news came with the announcement that billionaire investor Kirk Kerkorian has sold 12 million General Motors shares, although that sale apparently had more to do with offsetting capital gains taxes from his sale of the MGM studio for $4.9 billion to Sony Corp. and other partners. An article in the Detroit News reports that "GM is downsizing in North America and cutting plants but expanding in overseas markets, such as China." One analyst, Ken Endo, is quoted as saying "it doesn't make much sense to be comparing vehicle production numbers between the world's most profitable automaker and one that's on the verge of collapse."
For those of us brought up to believe General Motors would always be the leader this is sad news but it has only itself to blame. In the automobile business, product is everything.
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