Bloomberg News

GM Breaks 9 Million Taking Global Sales Crown From Toyota: Cars

January 23, 2012

Jan. 19 (Bloomberg) -- General Motors Co., saying today it sold 9.03 million vehicles worldwide last year, regained its spot as the world’s top-selling automaker as Toyota Motor Corp. struggled with floods, earthquakes and a tsunami.

GM’s deliveries rose 7.6 percent from 8.39 million in 2010, the company said on its website, topping an analyst’s estimate and exceeding the 9 million mark for the first time since 2007. Toyota, which ended GM’s 77-year reign as the world’s largest automaker in 2008, hasn’t reported full-year results. Toyota has estimated that 2011 calendar year sales will decrease 6 percent to 7.9 million.

The return to No. 1 marks a sharp rebound for GM, coming two years after the company exited a U.S. government-backed bankruptcy. When GM was last No. 1, in 2007, it was known as General Motors Corp. and lost $38.7 billion. Last year, the Detroit-based automaker may have earned $8.1 billion, the average of four analyst estimates.

“The difference between this title and other times is that they are profitable and that’s where the bankruptcy was helpful,” Rebecca Lindland, an industry analyst with IHS Automotive, said today in a telephone interview. “It’s great to be No. 1, but it’s a lot more fun to be profitable.”

GM Chief Executive Officer Dan Akerson has said that he places a higher priority on profit margins than on global unit volumes. While analysts estimate that GM will boost revenue 2.9 percent to $154.2 billion this year, he is pushing for profit margins before interest and taxes to beat those of Ford Motor Co. and Volkswagen AG.

“We need to focus on profits and margins and not necessarily try to post numbers on the board,” Akerson told reporters at the Detroit auto show earlier this month. “We want to grow in terms of our cash flow so we can continue to invest in both up and down cycles and be strong financially.”

GM Shares

GM rose 1.3 percent to $24.82 at the close in New York. The shares have gained 22 percent this year and losing 45 percent in 2011.

The U.S. still owns almost a third of GM. The government would have to sell its stake at an average of $53 a share to break even. GM earned $6.17 billion in 2010 and $8.47 billion in the first nine months of last year.

“More important than finishing the year with the most units sold is how it was accomplished,” Kevin Tynan, senior automotive analyst for Bloomberg Industries, said in an e-mail. “There were many years in the recent past in which GM won the sales title but operated unprofitably.”

Growth Drivers

GM’s Chevrolet brand, aided by the Cruze compact car, helped drive the automaker’s growth in 2011. Chevy had worldwide sales of 4.76 million cars and trucks last year.

The automaker’s two largest markets finished with similar totals. GM saw sales rise 8.3 percent in China to 2.55 million, including sales with its joint-venture partners, while deliveries rose 13 percent in the U.S. to 2.5 million. GM has said it wants to double its sales to 5 million in China by 2015.

GM’s Asia business, including its partnership with SAIC Motor Corp., has been helped by sales of its Wuling light trucks, which retail for about $4,400.

“These are not very expensive vehicles, but they are profitable and they sell a helluva lot of them,” said Joe Phillippi, principal of consulting firm AutoTrends Inc. in Short Hills, New Jersey.

Global auto sales will grow 6.7 percent this year to 77.7 million, R.L. Polk & Co. said earlier this month. Morgan Stanley estimated July 6 that GM would sell 8.5 million vehicles in 2011.

Volkswagen probably topped Toyota last year. The Wolfsburg, Germany-based company’s global deliveries rose 14 percent to 8.16 million. VW has said it aims to surpass GM and Toyota with 10 million sales by 2018. Executives privately want to meet the goal by 2015, a person with knowledge of the matter has said.

Toyota’s Rebound

Through three quarters, Toyota’s deliveries fell 8.8 percent to 5.77 million, as production was limited by natural disasters in Japan and Thailand. Next year it expects sales of Toyota, Lexus and Scion models to grow 7.3 percent to 8.48 million.

Toyota has the opportunity to rebound this year, especially as it works to rebuild depleted inventories for dealers, longtime industry watcher Maryann Keller, principal of a self- named consulting firm in Stamford, Connecticut, said.

“If they don’t have any significant disruptions to their global production system, they will not only be able to produce to meet demand but they’ll have to produce to refill inventory,” she said. “They have that extra opportunity to build more than say the market will buy.”

The battle to be the world’s top-selling automaker goes back to the days of Henry Ford and Billy Durant, the founders of Ford and GM.

Under the leadership of Alfred Sloan, GM took the sales title from Ford in 1931 during the Great Depression and retained it through World War II, the boom years of the 1950s and ‘60s, and the first five decades after Toyota began selling cars in the U.S.

New GM

Toyota first surpassed GM in 2008, the year then-CEO Rick Wagoner asked Congress for a loan to keep the company afloat. He was fired before the automaker entered bankruptcy protection June 1, 2009.

Harry Wilson, a former member of the Obama administration’s automotive task force, which oversaw GM’s $50 billion bailout, has said the group didn’t see GM retaking Toyota this soon after emerging from court protection on July 10, 2009.

“The challenge is going to be keeping the title because other manufactures, like Toyota and Volkswagen, are after it also,” said Lindland, the industry analyst based in Norwalk, Connecticut. “Toyota has something to prove. They’re on a mission.”

--Editors: Bill Koenig, Jamie Butters

To contact the reporter on this story: Tim Higgins in Southfield, Michigan, at thiggins21@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


Toyota's Hydrogen Man
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus