Tuesday, April 24, 2007

Toyota Now the Largest Auto Company

From the WSJ:

TOKYO -- Toyota Motor Corp. surpassed General Motors Corp. in quarterly sales for the first time, making it the world's biggest auto maker.

Toyota sold 2.348 million vehicles world-wide in the January to March period, topping the 2.26 million vehicles that GM sold in the same three-month period. GM has been the world's No. 1 auto maker for more than 70 years.

While the sales figures released Tuesday are only quarterly results, they represent the first time Toyota has surpassed GM in global sales. Analysts say it is just a matter of time before the Japanese auto maker surpasses GM in its annual figures.

Toyota has been steadily grabbing market share from its Detroit-based rival in the key U.S. market, as high gas-prices lure Americans to Toyota's smaller, more fuel-efficient vehicles such as the Camry, Corolla and Prius hybrid and away from GM's larger trucks and sport-utility vehicles. Sales of Toyota's high-end Lexus line grew 7% to 322,000 vehicles last year, making it the top-selling luxury brand in the U.S.

This really shouldn't surprise anyone. Japan has successfully implemented a great long-term strategy: build a quality product and people will buy it. For as long as I can remember, the general sentiment about Japanese cars is simple: they're well built.

In addition, Detroit as shot itself in the foot (again) with its strategy of selling large trucks in an era of rising oil prices. This entire situation is a complete replay of the 1970s when the oil shock first sent consumers to Japanese cars.

Finally, it shows the incredible effectiveness of a long-term strategy. Toyota has obviously been following a long-term plan which again revolves around a quality product. They have done this slowly and continually. And it has paid off handsomely.