GM Passes the Crown of Global Sales Leader - January 21, 2009

In what appeared to be only a matter of time, a report today showed that the Toyota Motor Corp. (TM) has taken over as the world’s top automobile sales company, relinquishing General Motors Corp. (GM) of that dubious honor which they held for the past 77 years.

GM released their totals for the past year in which the company sold 8.355 million cars and trucks, coming up nearly 616,000 units short of Toyota’s total of 8.972 vehicles sold. Having nearly surpassed GM in 2007, Toyota was a little less than 3,000 units short of that title back then.

Downplaying the importance of the newly relinquished title, GM’s executive director of global market and industry analysis Mike DiGiovanni, stated "I don't think being No. 1 in vehicle sales means much at all to the American consumer. I think what matters most to the consumer is strong brands and strong products. And the key thing right now with what the industry is going through now is viability and profitability."

On the global scale, sales for Toyota slipped 4% for the year, which made it possible to overtake GM in sales as the American automaker saw their worldwide sales figures drop 11%. Although Toyota doesn’t have that great of a presence in the European and North American markets, GM does, and sales there declined by 6.5%, with a 21% decrease in sales during the 4th quarter.

Included in GM’s losses for market share, sales within North America fell-off by 21% during the year as consumer shied away from big ticket purchases. In fact, sales outside of the continental U.S. accounted for 64% of GM’s sales, up from the previous year’s tally of 59%, thus proving that the domestic auto industry was in dire straits.

Before GM can think about regaining their crown, the company needs to find a way to stay afloat. If the company doesn’t receive their second installment of the government’s loan money, which was due January 16, the company could run out of money by the end of their 1st quarter.

"If we don't get our second installment of the funding we'll run out of cash, it's that's simple," Chief Operating Officer Fritz Henderson said. "We've been finalizing what we need to do. We anticipate receiving it. But it's critical that we receive it."

By the close of the markets today, shares of GM were trading in the green, adding $0.03, or 0.9%, to close the day at $3.53 per share. Meanwhile, shares of TM were up 2.5%, gaining $1.64 to conclude the session at $67.52 per share.

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