Paladin06

G.M. Trails Toyota as U.S. Sales Slow

By NICK BUNKLEY
Published: April 23, 2008
DETROIT — The General Motors Corporation said on Wednesday that the slowdown in the United States market had led to a decline in sales in the first quarter and had allowed Toyota to take the lead in this year’s global sales race.

G.M. said its first-quarter sales had fallen less than 1 percent, but it was enough to slip behind its Japanese rival by about 160,000 vehicles.

Toyota sold 2.41 million vehicles, a 2.7 percent increase, to G.M.’s 2.25 million. Toyota outsold G.M. in the same period a year ago but ultimately fell short of G.M. for all of 2007 by about 3,100 vehicles.

But G.M. could have more difficulty keeping pace this year as record crude oil prices and gas prices near $4 a gallon dampen demand for vehicles in the United States, where G.M.’s market share is still a considerably larger than Toyota’s.

G.M. joined several other automakers Wednesday in predicting that the auto industry’s worst months were still ahead. It said overall sales in the second quarter were shaping up to be lower than expected.

“The big caveat is gas prices,” G.M.’s chief sales analyst, Michael C. DiGiovanni, said. “This is clearly a headwind we didn’t anticipate would be to this level.”

Mr. DiGiovanni said G.M. had raised its forecast for oil prices twice, though he did not reveal what range the company now anticipates. Crude oil for June delivery was trading at more than $117 a barrel Wednesday morning in New York, and the average price of regular gas has reached a record high of $3.533 a gallon, according to the AAA motor club.

Still, he said that G.M. remained upbeat about the latter part of the year, when it and other automakers believe a recovery could begin. Chrysler is among those that have since backed away from that prediction.

“The fundamentals are in place for a second-half recovery,” Mr. DiGiovanni said. “We’re starting to see the positive signs that we thought we would see.”

G.M. hopes sales growth in other countries will allow it to retain its 76-year-old title as the world’s largest automaker. In the first quarter, 64 percent of G.M.’s total sales occurred outside the United States, the most ever. Sales grew 78 percent in Russia and 58 percent in India. North America was the only region in which G.M. did not set a sales record.

Company executives have said they are more concerned with returning G.M. to profitability than staying ahead of Toyota. G.M. lost more than $50 billion from 2005 to 2007, though nearly $39 billion was an accounting charge in 2007.

Still, G.M. does not plan to cede any ground without a fight.

“We obviously want to win,” Mr. DiGiovanni said. “We want to be No. 1 in sales at the end of the year, and we’re going to compete very hard to do that. But our goal is profitable sustainable growth around the world.”

RLSH700

The King was eclipsed, not killed. If they were out of business, then they would be dead, but they are still in business currently. The thing I think is quite ironic is that Toyota has gotten where they are today by making the same short-term decisions that the Big Three made which has lead them to the rut they are in. It will catch up with them as time goes on.

Paladin06

Not really totally true.