Going by how vehicle unit sales have panned out in the first ten months of the year, Toyota Motors (NYSE:TM) is likely to usurp General Motors (NYSE:GM) as the world’s largest automaker by the number of vehicles sold. But things could take a U-turn next year as the U.S. and China markets heat up. After all, how good or bad a company performs in the world’s two biggest automobile markets will largely decide who will claim the crown of world’s largest automaker.
Starting Off With The U.S.
Toyota’s sales in the U.S. are up 30% through October as the automaker recovers from its earthquake-hit 2011. The corresponding figure stands at 3.6% for GM. U.S. sales account for a little more than a fifth of total unit sales for Toyota while for GM, it accounts for about 30% of sales. 
To keep its sales rolling next year in the U.S., Toyota debuted the new RAV4 at the ongoing Los Angeles auto show. The Japanese automaker expects the model’s sales to touch 200,000 units in 2013, which is 20% more than the model’s sales this year. At the same time, its Camry and Prius Hybrid continue to do well, and we expect the sales momentum to continue into 2013 as well. 
- Toyota Motors Acquires Daihatsu : Betting On The Small Cars Market ?
- How Do Auto Luxury Brands Compare In The US?
- Toyota Steps Up Its Luxury Game In Search For More Profits
- Toyota Earnings Review: Strong Quarter In U.S. Closed Out Year As FX Headwinds Continue To Mount
- Earnings Preview: Strong U.S. Sales, Weak Yen Should Boost Toyota’s Bottomline
- Will Hybrids Drive The Future For Toyota Motors?
Meanwhile, GM will launch a total of 13 new or refreshed Chevrolet brand models in the U.S. including an upgraded Silverado pickup truck and a new Corvette sports car. The company also plans to reinvigorate sales of its luxury brand Cadillac through model refreshments and new introductions. GM has also introduced first-time models such as ATS 2013 and XTS 2013 this year and will eventually launch the next generation Escalade, a new CTS sedan and the ELR plug-in electric coupe.
Heading to China
China, the world’s biggest automobile market, could single handedly decide the fate of the result as there is a greater degree of uncertainty associated with it. Japanese automakers have been struggling in China of late due to tensions between the two countries on claims over the disputed islands. This has resulted in a wave of anti-Japanese sentiment in the country.
On the positive side, Toyota believes the worst is over as the tensions have subsided for now and the anti-Japanese sentiment may soon fade away. Toyota will launch a whopping 20 new models in China in the next three years. The company also plans to offer discounts and attractive packages to woo back lost customers. 
GM, on the other hand, continues to perform impressively in the country with sales up 10.3% to 2.3 million through October. Furthermore, GM, through its joint venture (JV) SAIC-GM-Wuling Automobile Ltd. opened another manufacturing unit in China to boost production of its low-cost models such as the Bajoun, sales of which exceeded 10,000 units in October. The new plant will help the automaker raise its capacity by 400,000 units eventually.
GM is now spending another $1 billion to build its third plant in the world’s biggest auto market. The plant will be functional in 2015 and will help the automaker achieve its target of producing 2 million vehicles in China by 2015. 
Another factor to take into account is that Toyota’s sales this year have been buoyed by a revival of Japanese auto market, helped by eco-car subsidies offered by the government. The Japanese auto market plummeted 15% to 4.2 million units in 2011 due to the tragic natural disasters. However, with the help of the government’s subsidies, the market has rebounded sharply in 2012 and could very well touch 5 million units. The Japanese market is dominated by domestic companies such as Toyota, Honda and Nissan so any incremental gains in the overall market will in turn benefits these companies. On the other hand, the subsidies have already ended and sales for the October-December quarter are expected to be negative over the previous year quarter. Negative growth could very well continue into 2013 as well.Notes:
- U.S. Auto Sales, wsj.com [↩]
- Toyota Says U.S. Sales May Exceed 2 Million This Year, November 29, 2012, bloomberg.com [↩]
- Toyota, Honda vie to regain sales in China, November 26, 2012, theprovince.com [↩]
- GM joint venture in China plans $1 bln auto plant, its third in world’s biggest auto market, November 29, 2012, washingtonpost.com [↩]