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Toyota Still Tops – But Sales Gap Narrowing

GM comes in a close second for Q1, VW close behind.

by on Apr.24, 2013

Akio Toyoda with the new Lexus ES.

Toyota maintained its title as world’s best-selling automaker for the first quarter of 2013 – though the gap began to close as the Japanese maker struggled to regain its momentum in the critical Chinese market.

The industry giant — which regained its sales crown last year after a disastrous loss of production in 2011 due to Japan’s devastating earthquake and tsunami — reports selling 2.43 million vehicles between January and March. But that was a 2.2% decline.  General Motors maintained its second-place position at 2.36 million vehicles, but closed much of the gap with a 3.6% increase.

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Volkswagen, which finished 2012 in third-place, maintained that podium position for the first quarter after a 5.1% increasing in global demand brought its sales to 2.27 million. VW officials have openly set a goal of becoming the world’s number one maker before the end of this decade.

(VW Earnings plunge on weak European sales. Click Here for more.)

Whether Toyota can maintain its lead is unclear.  On the positive side, the maker gained ground in a number of markets, notably including the U.S., where demand rose 7% for the first quarter, driven by the introduction of new products and the overall recovery of the American auto market.

But Toyota has some challenges ahead.  Like its key competitors, it is struggling in Europe. But China poses a much bigger challenge.  VW and GM remain the dominant players in what is now the world’s largest automotive market.  Toyota, meanwhile, had been aggressively trying to increase its share of that market until it was caught in a political battle between China and Japan over a chain of uninhabited islands both nations claim.

That led to riots in some parts of China last year. Some Japanese vehicles were damaged or destroyed and a Toyota dealership was set on fire. A boycott against Toyota and other brands has caused Japanese makers serious problems.

Where GM set a new record for the quarter and VW saw its sales jump 10%, Toyota saw demand in China drop 13% for the January – March period, after a 4.9% increase in 2012. And the situation doesn’t appear to be improving.

“Our original expectation was for sales to come back in half a year, but now our plan is to push harder after our new product introductions in the fall,” Toyota’s senior Chinese executive Hiroji Onishi, said during a news conference at the Shanghai Auto Show last weekend.

Meanwhile, the industry giant has had some unexpected problems in its home market, Japanese sales dipping 15% for the first quarter.

As it often does when the subject of the sales race comes up, Toyota downplayed the battle.

“Rather than pursuing numbers, we try to sell one car at a time, producing good cars. We aren’t focused on being No. 1,” company spokeswoman Shino Yamada told the Associated Press.

There are good reasons for Toyota to downplay the sales race internally.  Company insiders have said senior management got distracted during much of the last decade and allowed quality to slip. They also failed to respond to safety issues that led to a series of disastrous recalls for so-called unintended acceleration. Toyota has suffered more vehicles being recall in the U.S. market than any other brand during three of the last four years.

President Akio Toyoda, grandson of the maker’s founder, has said he wants to put the primary emphasis on quality, safety and customer satisfaction – even while outlining sales goals that would likely keep Toyota in the number one sales spot for all of 2013.

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