So far, Toyota's out in front

Europe's financial woes have trimmed Volkswagen's sales there. Photo / Supplied

Toyota, rebounding from lost production after last year's natural disasters in Asia, is on pace to outsell General Motors and Volkswagen and reclaim its title as the world's top-selling automaker.

Toyota sales rose 34 per cent in the first six months of the year to 4.97 million globally, leading GM by 300,000 and VW by 520,000 deliveries. GM global deliveries rose 2.9 per cent to 4.67 million during the first half while VW sales increased 8.9 per cent to 4.45 million, say the companies.

The results pave the way for Toyota, led by company president Akio Toyoda, to reclaim the lead in annual global auto sales from GM a year after the tsunami in Japan and floods in Thailand roiled production.

The recovery in production helped Toyota's sales rebound in the US and Japan, its two biggest markets, while GM and Volkswagen struggled with a shrinking European market.

"Toyota has bounced back stronger than expected," says Jeff Schuster, senior vice-president of forecasting for LMC Automotive in Michigan. "We are now at the critical mid-year point in the race and, given Toyota's lead, it will be very difficult for GM to catch Toyota."

While the largest Asian automaker expanded its lead from 210,000 vehicles over GM and about 330,000 over VW after the first quarter, the Toyota City, Japan-based company may begin to lose momentum.

"Keep in mind Toyota's sales may be stronger in the first half of 2012 than the second half because they are still recovering from the impact of the tsunami last year and re-stocking dealerships, pulling in consumers who may have waited," says Rebecca Lindland, an industry analyst with IHS Automotive. "But that positive impact will trail off as the year progresses."

Toyota, GM and VW are locked in a battle for global supremacy and the bragging rights and scale that come with being the world's biggest automaker.

"I'm sure GM would love to be No 1, but they would rather be profitable so they are not going to get into a market-share race at the expense of their balance sheets," says Lindland.

Toyota overtook GM to become the world's largest automaker by sales in 2008 as the US market collapsed and GM headed towards bankruptcy reorganisation in 2009. GM, based in Detroit, regained the sales lead last year as Toyota's output was limited following the natural disasters in Asia.

"It's difficult to compare this year to last year because last year was such a special circumstance," says Dave Sullivan, product analyst at AutoPacific Inc in the US.

GM's new Cruze small car (sold in New Zealand as a Holden) benefited from Toyota's limited presence in the US market last year, says Jesse Toprak, an industry analyst from TrueCar.com. US sales of the Chevrolet Cruze soared to 231,732 from 24,495 in 2010 when the vehicle first arrived in GM's home market. So far this year, Cruze sales in the US have fallen 7.4 per cent, according to researcher Autodata Corp.

When "you couldn't find a lot of Japanese cars, you had these new domestic products. It was almost the perfect storm," says Toprak. "When consumers are thinking small car, most consumers in the US are still thinking Japanese, they're still thinking Toyotas."

Toyota has also been more aggressive with incentive spending in the US, he says.

GM, which posted a record calendar year profit of US$9.19 billion ($11.3b) in 2011, is struggling to stem losses in Europe. Its US share fell to 18.1 per cent after six months this year from 19.9 per cent for the same period last year, according to Autodata. Toyota's US share rose to 14.4 per cent from 12.8 per cent.

Seventy per cent of GM's US nameplates will be redesigned or new in 2012 and 2013, Cain of GM says.

"We are in the early days of the most aggressive roll-out of new products in our history, which will help us press our advantage in the US and China and grow profitably around the world," he adds.

Toyota's sales include Hinos and Daihatsus. GM's sales include the Wuling brand in China. While Volkswagen has several brands, including Skoda, Audi and Lamborghini, its total doesn't include Porsche, which the company takes over next month.

- Bloomberg