October 22, 2007

GM Back On Top... For Now

New quarterly earnings reports show that GM remains the world's No. 1 automaker, following a scare earlier this year when Japanese automaker Toyota briefly overtook the American stalwart in sales.

According to its third-quarter filings, Toyota sold 2.34 million vehicles, slightly fewer than the 2.38 million units moved by GM in the same period. GM also beat out its Japanese rival in sales for the year by about 10,000 vehicles.

GM has reason to celebrate after a bruising year that included a strike by the United Auto Workers, but long-term concerns remain. As the American market as a whole grapples with rising manufacturing and labor costs, analysts believe that Japanese automakers will eventually overtake GM if conditions in the U.S. don't improve.

The Detroit Free Press reports that Toyota has a larger profit margin than GM, despite losing the sales race. Earlier this month, Bear Stearns downgraded GM's stock to "underperform" after details of the deal with UAW were released.

U.S. automakers lag behind the Japanese in producing inexpensive, high-quality, low-mileage hybrid vehicles. Growing concerns about the environment along with high fuel costs put U.S. automakers at a disadvantage.

"With oil prices rising, Toyota has the advantage in the long run," auto analyst Yoshihiro Okumura told AP. "Toyota is making a dash to the top."

GM is pinning a lot of its hopes on the Chevrolet Volt, a plug-in hybrid introduced at the Detroit Auto Show at the beginning of this year. The company hopes for a rollout within the decade. However, scientists haven't been able to figure out how to make the battery on which the Volt will run.

"CBS Sunday Morning" recently profiled the Volt, along with other electric cars in development. The Wall Street Journal reports today (subscription) that Toyota is approaching the lithium-ion battery-powered car more cautiously than GM.

Photo by Flickr user Mark Emmerson.

Posted at 11:28 AM
Posted to: Asia, Economy, Japan
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