Photo finish: GM still No. 1

Carmaker sold only about 3,000 more vehicles worldwide than Toyota in 2007.

Sharon Terlep / The Detroit News

General Motors Corp., after 76 years as the undisputed leader of global auto sales, finished 2007 with a razor-thin lead over Japanese rival Toyota Motor Corp.

The Detroit automaker said Wednesday that it sold 9,369,524 cars and trucks worldwide last year, and Toyota said it sold 9.366 million — a gap of only about 3,000 vehicles. The virtual tie reflects a dramatic shift in the competition between the two automakers; just a decade ago, more than 3 million vehicles separated them.The near tie marks a bleak milestone for Detroit’s struggling auto giant. But unexpectedly hanging on to the No. 1 spot also underlines GM’s strength in the world’s vast and still relatively untapped emerging markets.

GM was widely predicted to fall measurably behind Toyota, but managed to stay ahead with record-breaking sales in several markets outside North America. "Would we like to be the largest? Of course," said Bob Lutz, GM’s vice chairman of product development.

"Will we continue to fight? Yes. The bottom line is that we’ll continue to do what’s best for our customers, for our shareholders."

Emerging markets — namely China, Russia and Brazil — are primed to be the next battlegrounds in the sales race, with the U.S. economy struggling and domestic auto sales at a standstill.

Growth in those countries helped GM recover after falling behind Toyota during last year’s first quarter. GM’s 2007 sales were the second-best in its 100-year history, trailing only 1978 when the company sold 9.55 million cars and trucks.

"These markets are leapfrogging other markets in their speed," said Chris Lacey, executive director of GM’s central and eastern European operations, where GM sales rose from 100,000 in 2001 to 522,000 last year.

New markets key for sales

The growing wealth and surging populations in the world’s emerging markets are becoming more critical as sales gains slow in more developed countries, such as the United States, some Western European nations and Japan.

GM’s sales swelled 19 percent in Latin America, Africa and the Middle East and 15 percent in Asia. A 9 percent increase in Europe was fueled by booming sales in Russia, where GM sold about 260,000 vehicles in 2007, nearly twice its 2006 tally.

Lutz said Wednesday that part of what automakers must do to compete in emerging markets is create separate "parallel" product lines of low-cost vehicles that meet basic transportation needs but don’t require the same safety features demanded by consumers in developed countries.

GM for years has aggressively pursued foreign growth and leads Toyota in 15 of the world’s top 20 emerging markets. But Toyota is gaining ground quickly in places where it lags, while snagging more consumers in the United States, still the world’s largest and most profitable market.

Both carmakers, meanwhile, are hampered by stagnation in their home markets. U.S. sales hit a nine-year low in 2007, while fewer people are buying vehicles in Japan as its population ages.

Toyota’s U.S. sales were up 3 percent in 2007, when the automaker overtook Ford Motor Co. for the No. 2 spot.

GM’s U.S. sales fell 6 percent, pushed down in part by an intentional reduction in less-profitable sales to rental fleets.

Toyota said last year it expects modest growth in Europe and solid gains in booming China and Russia, where it’s locked in fierce competition with GM.

"Toyota has definitely made up for lost time in markets where GM is ahead," said Michael Robinet, of CSM Worldwide, an automotive forecasting firm in Northville.

GM’s global sales have grown about 4 percent from a decade ago. Toyota’s growth rate for the same period: more than 60 percent. "In the end, it doesn’t matter how you count it — it’s a matter of where each manufacturer is putting its resources," Robinet said.

The Japanese automaker has outlined ambitious sales targets for 2008 that, if achieved, would likely propel it beyond GM. Toyota plans to build 9.95 million cars and trucks in 2008 and expects to sell 9.85 million, a 5 percent increase over 2007 sales.

GM wouldn’t predict next year’s sales. GM’s global market and industry analyst Mike DiGiovanni said Wednesday that GM could have sold more vehicles in China, Brazil and some Latin American countries if it could build more vehicles.

"We’re looking at more alternatives to aid us in that area," he said, but would not specify if that meant GM was looking to add production capacity.

Comparisons still difficult

Even the release of last year’s final sales numbers is unlikely to squelch debate about who came out on top, however, in part because the complexity of global auto operations makes exact comparisons difficult. Both GM and Toyota typically include joint ventures with other companies in their sales numbers. Some argue that portions of those joint sales shouldn’t count toward the total.

"Either company could have turned the knob up to build more vehicles and gain the title," CSM’s Robinet said. "At the end of the day, it’s much ado about nothing. The average customer in Des Moines, Iowa, couldn’t care less."

GM’s Lutz concedes that the automaker could eventually fall behind Toyota in the global sales tally because the Japanese automaker is gorwing faster than GM in many areas. But that may not be all bad, he said. "It could be a motivator."