GM Takes Sales Lead Over Toyota on Emerging Markets

Oct. 22 (Bloomberg) — General Motors Corp. outsold Toyota Motor Corp. in the first nine months of the year, buoyed by sales outside the U.S., in the battle to extend its 76-year reign as the world’s largest carmaker.

GM sold 7.06 million vehicles through September, taking a lead of 10,000 units over Toyota’s 7.05 million, the two companies said in separate statements. At the end of the first half, Toyota led by 39,000 vehicles.

Toyota’s sales in the U.S., its largest overseas market, dropped each month of the third quarter, the longest stretch of declines since 1995. Detroit-based GM won customers in Brazil, Russia and China, boosting sales by 4 percent in the quarter.

“Both companies face mature home markets and have to look to emerging markets for growth,” said Koichi Ogawa, who helps oversee $28 billion at Daiwa SB Investments Ltd. in Tokyo. “Being the top in sales is a matter of pride. Profits are still what investors care about.”

Toyota sold 2.34 million vehicles globally, compared with GM’s 2.39 million, in the three months ended Sept. 30.

Toyota’s sales include those of subsidiaries Daihatsu Motor Co. and Hino Motors Ltd. The Toyota City, Japan-based carmaker’s shares fell 2.1 percent to 6,120 yen to a 52-week low at the close of trading in Tokyo. The decline came as the yen rose to a six-week high against the dollar. A stronger Japanese currency erodes the value of Toyota’s sales in the U.S. Toyota’s shares have declined 23 percent this year compared with a 22 percent gain at GM.

GM’s Performance

GM’s biggest boost in the quarter came from its Latin America, Africa and Middle East region. Sales there advanced 22 percent to 329,398 units, including a 29 percent increase in Brazil. GM plans to spend $500 million during the next three years in Brazil and Argentina to develop small vehicles for South America.

Sales in GM’s Asia-Pacific region, which includes Australia, gained 16 percent to 327,522. GM said it expects to reach 1 million sales in China by year’s end.

GM’s sales in North America, its largest market, declined 6.1 percent during the quarter to 1.21 million vehicles. The carmaker, in its eighth straight year of declining U.S. sales, wants overseas business to account for more than 60 percent of its global volume. The percentage was 57 through September.

Oil Prices

With crude oil trading near a record $90 a barrel, Toyota is benefiting from higher demand for more fuel-efficient cars. The automaker captured five of the U.S. government’s top 10 fuel-economy ratings for 2008 cars and trucks, the U.S. Environmental Protection Agency said on Oct. 12. Toyota’s Prius gasoline-electric hybrid car topped the rankings, followed by Honda Motor Co.’s Civic hybrid. Hybrids accounted for six of the top 10 vehicles in the survey.

“The American man in the street looks at functionality, quality, value for money, safety features — and with oil approaching $90 to the barrel, running costs,” said Jon Easton, who manages about $100 million in Japanese equities at EN Asset Management in Tokyo.

Toyota, which earns as much as 60 percent of operating profit in North America, is poised to top GM in global production this year after the U.S. automaker reduced its output plan because of slumping demand for trucks and sport-utility vehicles. In the quarter ended June 30, Toyota earned 491 billion yen, 4.5 times more than GM.

GM estimates it will build 9.285 million vehicles worldwide this year, the company said last month. That compares with Toyota’s group plan of 9.42 million vehicles. Toyota group sales should grow 6 percent to 9.34 million vehicles in 2007, the carmaker said in December.

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