It has taken almost 80 years, but General Motors Corp. (GM) might finally be about to lose its crown as the world’s biggest carmaker. The numbers currently available for global vehicle sales last year currently put the Detroit manufacturer neck-and-neck with Toyota Motor Corp.—in fact, its Japanese rival might even pip it to the post, if only by about 500 runabouts. Toppling GM from its decades-old podium would mark an important milestone, but in fact GM’s leadership position is only symbolic anyway. By virtually every measure other than vehicle sales, Toyota has long since pulled ahead.
GM announced it sold 9,369,524 vehicles in 2007. Toyota said last week it had sold roughly 9.37 million vehicles, and would provide more exact figures at the end of the month.
By stock market value, it is almost 11 times larger than GM—in fact, even Toyota’s book value is bigger than GM’s market value. Toyota also consistently pumps out a juicy net operating margin. It should hit 6.9% for its financial year ending in March.
Its Motown rival, by contrast, probably only just eked out a profit in 2007, and that’s ignoring the whopping $39 billion (Rs1.54 trillion) tax-related charge it took in the third quarter.
True, GM has taken a number of steps to try to boost its earnings potential. But it’s been on the back foot in the face of declining market share and borderline profitability. Regardless of who wins the sales tussle this time around, Toyota will remain better placed for the next battle. It has net cash on hand, rather than a gargantuan pile of debt, and a better mix of cars than the gas guzzler-heavy offerings from the Detroit stable.
Stealing GM’s sales crown may be cause for celebration back in Toyota City. But it’s unlikely to be the measure Toyota’s bosses care about.