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Friday, 27 April, 2007 10:50 PM

Toyota tops GM in 1st Quarter sales but expert says don't worry

PHOTO BY JASON RZUCIDLO / AMERICAJR.com

The Toyota Prius has led the automaker's sales hike with a 72.9% increase in sales in the 1st Quarter of 2007 compared to 1st Quarter sales in 2006.

By Jason Rzucidlo
americajr@americajr.com

Toyota has sold more cars and trucks than General Motors globally for the first time ever. An expert says GM will remain competitive and still has confidence in the American automaker during its turnaround period.

Toyota Motor Corp. sold 2.35 million vehicles in the 1st Quarter of 2007. That is an increase of 9% from the same time period in 2006. It is also a sales record for the automaker.

Reasons for the surge in sales at Toyota are attributed to the popularity of the Prius, Camry and the Corolla. The automaker has already sold 45,000 models of the Prius. That is a jump of 72.9% from the previous year. The Camry has already sold 119,800 models in the 1st Quarter. That is an increase of 6.8% from 2006. Toyota has sold 92,629 copies of the Corolla, a climb of 1.7% from a year ago.

"I think it's the price of fuel. The Federal Tax credits are still in effect. There was an increase in production," said Irv Miller, vice president of corporate communications at Toyota. The automaker has set a goal of producing 175,000 copies of the Prius hybrid car in 2007.

Toyota also sees the growth continuing over the next few quarters. "We hope too. Our customers will determine our sales plan. That's our target," Miller said.

This year was the first time Toyota stock cars were driven in the NASCAR Nextel Cup series. Toyota has been a part of the Craftsman Truck Series and the NASCAR Busch series for the last few years. "We certainly got a lot of coverage in NASCAR involvement. I would imagine it increased sales," Miller stated.

Toyota has been expanding at a very fast pace. The automaker is constructing a manufacturing plant in Mississippi that will be open by 2010. The plant will have the capacity of building 150,000 vehicles per year. Toyota has also been increasing its incentives on its vehicles.

General Motors releases sales figures for Q1 of 2007

At GM, total sales for the 1st Quarter were 2.26 million vehicles worldwide. That is a jump of 3% from the previous year and also a sales record for the auto manufacturer.

The best-selling brand at General Motors was Saturn, which seen an increase of 20% in sales for the 1st Quarter over that time period a year ago. GMC was the second best-selling brand with sales going up a little over 6% in the 1st Quarter. Chevrolet rounded out the top three brands at GM with a sales hike of 4% during the quarter.

"We had a record 1st Quarter. We are successful and will grow. We're not concerned with a race. We're going to keep doing the same things," said John McDonald, spokesman for GM sales and marketing communications.

McDonald wants to set the record straight that GM is not concerned with its competitors. "People are making it a race at Number One. The North American retail market is stabilizing. We're continuing to execute our plan," the spokesman said.

"GM is taking tough medicine in North America. We've reduced incentive spending by $700. Pulling 100,000 rental units enables us to have more profitable products. We're taking advantage of emerging markets," McDonald added.

In terms of hybrid cars, GM has the Saturn Vue already on the road. General Motors will have a hybrid version of the Saturn Aura and the Chevy Malibu on the road by the end of 2007. Those vehicles will both be a 2008 model. Those hybrid automobiles will make GM more competitive with Toyota. The American automaker already has 2 million E-85 ethanol-ready vehicles on the road.

McDonald said GM is never content with sales. The automaker is always looking for more. GM faces competition from lots of manufacturers, most of which are not global competitors. GM is not concerned with rankings. They look at all the other manufacturers collectively.

"What's relevant is to make the best cars and trucks, " said the GM spokesman.

Automotive expert says don't worry about GM

Dave Cole is the chairman of the Center for Automotive Research in Ann Arbor. He has been following the auto industry for the last 30 years. Cole believes GM falling to second place in sales will not make a difference. He says that GM's recent changes are moving the automaker in the right direction.

The major factor for General Motors is the upcoming labor conference, which will be held this summer. If an agreement is reached, it would be a plus for GM. Cole is confident that there will be a new agreement reached between GM and the UAW.

However, GM has to continue is current restructuring plan. If they are innovative, the automaker will prosper and their future will be bright. "I would stay on the same course. Toyota and Honda are really establishing a benchmark," said Cole.

The chairman of C.A.R. believes GM is turning around like it should. He highlights the fact that GM won Car and Truck of the Year Awards at the recent 2007 North American International Auto Show. If the auto maker produces the Volt hybrid electric car, they will exceed the fuel economy of the Toyota Prius. "If they use E85, they're fuel economy would be over 400 mpg," Cole stated.

GM has cut its sales to rental companies by 100,000 and will do the same next year. Rental sales were not profitable for the automaker. By not selling to rental companies like Enterprise, GM gets to keep the residual value of its cars and trucks higher. This move will increase the value of new car sales over the long run. However, if GM were to have sold 100,000 vehicles to rental companies, their total sales would have been higher than Toyota for the 1st Quarter.

In terms of China, General Motors is the number one automaker. "It's a very competitive market. Everybody's growing in China," the chairman of C.A.R. added.

As for the 2nd Quarter, Cole believes that Toyota will continue its growth and GM will grow with continued discipline. The expert does not see a spurt in sales of new cars because of the soft housing market.

"I think the trends are likely to continue. Stay tuned. It's gonna be an interesting period of time," Cole added.

 

PHOTO BY JASON RZUCIDLO / AMERICAJR.com

Sales of the Saturn Vue drove GM to record sales in the 1st Quarter of 2007.

 

 

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