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Old 01-29-2009, 05:49 AM   #1
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Toyota takes sales crown from GM

Toyota takes sales crown from GM
The Japanese automaker becomes No. 1 in the world for 2008, ending GM's 77-year reign -- but both companies see sales drop in a tough year.

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By Elizabeth Strott Toyota Motor (TM, news, msgs) has topped General Motors (GM, news, msgs) as the No. 1 automaker by global full-year sales, ending GM's 77 years on top.
GM missed Toyota's 2008 sales of 8.97 million by about 616,000 vehicles. Troubles in the U.S. market plagued the Detroit automaker, which said North American sales slumped 21% in 2008.
This "is more symbolically significant," said Rebecca Lindland, auto analyst at IHS Global Insight. "It's a shame that it happened. GM is a company with an iconic history, but they've had to make some tough decisions in terms of not buying market share."
Still, Lindland said: "I'd rather see (GM) take the No. 2 spot and make a profit."
GM global sales executive Jonathan Browning said that the entire global auto industry was hit last year; global sales for the overall industry fell by 3.5 million vehicles.

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GM reported an 11% decline in overall sales in 2008 from 2007, when it sold 9.37 million vehicles. Toyota's sales declined 4% in 2008.
Troubles in the U.S. market plagued the Detroit automaker, which said North American sales slumped 21% in 2008 to 3.6 million. Outside of the U.S., GM sold 5.37 million vehicles last year, with a more modest 6.5% drop in European sales -- and increases in Latin America, Africa, the Middle East and the Asia-Pacific region.
(GM was popular in Russia, where it posted a 30% jump in sales last year, as well as China, whose sales rose 6%.)
For Toyota, bittersweet milestone
The sales milestone must come as bittersweet news at Toyota, which announced Tuesday that it was promoting Akio Toyoda, the grandson of the company's founder, to president.

In late December, Toyota forecast its first operating loss in 70 years because of the economic meltdown. Toyota said it expects to lose 150 billion yen ($1.7 billion) for its fiscal year that ends March 31.
In early 2008, Toyota had been gearing up for a strong year, aided by its hybrid Prius brand. When gas prices hit record highs last summer, consumers pulled away from the gas-guzzling SUVs and pickups that were core products for U.S. automakers, focusing instead on more fuel-efficient vehicles made by foreign rivals.
But Toyota has not avoided the global slowdown: Pinched consumers have cut back on big-ticket purchases and tumbling energy costs have lessened the demand for hybrids.

An ugly end to 2008
In the fourth quarter of 2008, when GM and privately held Chrysler pleaded for -- and receiving -- billions in aid from the federal government, sales at GM tanked 26% to 1.7 million from the same quarter in 2007.

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General Motors and Chrysler each received an initial $4 billion in assistance from the government in exchange for restructuring and moving toward more fuel-efficient cars.
"They were running out of money, and with the credit markets the way that they are, it's so difficult to get any kind of financing. It wasn't ideal, it wasn't what they wanted to do, but they didn't have a choice," Lindland said.
Tight credit, economic squeeze
The automakers have been slammed as the economy has crumbled, forcing them to close plants and create partnerships.

Auto dealerships are closing, and auto parts suppliers are being hit.
GM this morning said it expects to receive an additional $5.4 billion in the next few days; the installment was supposed to have come on Friday, and the delay is a huge worry for the company.
"If we don't get the second installment of our funding, we'll run out of cash. It's that simple," GM Chief Operating Officer Fritz Henderson said at the Automotive News World Congress in Detroit this morning.
In December, the government said it would loan $13.4 billion to GM for three years, and the company has a March deadline to present a viable business plan.
Under the program, GM faces a Feb. 17 deadline to show the progress it has made.
On Tuesday, Italian automaker Fiat announced a deal with Chrysler where it would take a 35% stake in the U.S. company in exchange for technology. The deal is contingent on Chrysler getting $3 billion in additional government loans.

Looking ahead
GM said today that it expects industrywide U.S. sales to come in below 10 million units in January because of a decline in fleet sales.

Automakers have a tough few years ahead, Lindland said.
"They have to sell cars that consumers want to buy," she said. "Most consumers actually prefer larger vehicles than these subcompact and compact cars; there is a balance between retooling for some of the smaller, more fuel-efficient vehicles and the reality of what American consumers want."
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Old 01-29-2009, 05:51 AM   #2
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don't worry. toyota is facing some financial troubles now & after that massive recall they just issued, their hype will die off.
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