GM on course to pass Toyota as top world producer
GM on course to pass Toyota as top world producer
Associated Press
DETROIT
General Motors is almost certain to claim the title of world’s biggest automaker this year, retaking the top spot from Toyota, which has been hurt by production problems since the Japanese earthquake and still can’t escape the shadow of major safety recalls.
The No. 1 title, a morale booster for the winner’s employees and managers, would cap GM’s remarkable comeback from bankruptcy.
GM’s sales are up, mainly in China and the U.S, the world’s top two markets. Its cars are better than in the past, especially its small cars.
The GM Lordstown Complex has contributed significantly to that rebound, producing the new Chevrolet Cruze small car. The Cruze ranked as Chevrolet’s top-selling automobile in the first quarter of 2011 and has kept the Mahoning Valley plant buzzing with some 4,000 employees.
But even though GM came within 30,000 sales of Toyota last year and began strong in 2011, any sales victory this year may have more to do with Toyota’s problems.
First, a series of big recalls has ballooned to 14 million vehicles worldwide and damaged Toyota’s reputation for reliability. That has spurred loyal buyers to look at other brands. Second, a March 11 earthquake and tsunami in Japan curbed Toyota’s car production. .
Here’s why GM is almost a lock to retake the lead:
A BETTER GM
General Motors Co. was dysfunctional three years ago, hobbled by enormous debt and a giant bureaucracy. Its quality was suspect, it lost billions, and it had few products other than pickups that buyers found appealing.
After a government bailout, a leaner GM emerged from a 2009 bankruptcy with new vehicles and a focus on Chevrolet, Buick, GMC and Cadillac. Since then, GM has come up with hits including the the Chevrolet Cruze compact, Chevrolet Equinox small SUV and the Buick LaCrosse luxury car.
Its quality is better. Sales so far this year are up 25 percent in the U.S. and 10 percent in China. The efficient Cruze compact and Chevrolet Volt car both hit the market as U.S. gasoline prices started rising.
TOYOTA TROUBLES
Bad publicity from the recalls, mainly for cars that can accelerate without warning, was hurting Toyota long before the earthquake. The recalls began late in 2009, and came just as GM, Ford, Hyundai, and others introduced more competitive cars and trucks. With a bunch of nice alternatives and doubts about quality, customers who once dutifully returned to Toyota started considering other brands. Many Toyota models look old and need upgrades.
Despite rebates and low-interest financing, Toyota was the only major automaker with lower U.S. sales last year. Sales are up 12.5 percent so far in 2011, but only at half the growth of GM.
Toyota is scrambling to keep factories open after the earthquake, and U.S. dealers expect to run out of some models. Already dealers are reporting shortages of the Prius gas-electric hybrid, a high-demand model because of gas prices.
THE CHINA FACTOR
Toyota has nowhere near GM’s presence in China, now the world’s largest auto market. Through March, Toyota sold 208,000 vehicles there, but GM and its joint ventures sold more than three times that number.
Growth in China by itself probably would have moved GM ahead of Toyota in worldwide sales. Toyota’s lead was only about one day’s worth of sales for GM.
GM would have to run into major problems to let No. 1 slip away this year.