Toyota Moves Past GM in First-Quarter Sales Toyota surpassed GM in car sales in the first quarter of 2007, even as both companies posted record sales numbers. It's the first time that has happened, and it gives Toyota a legitimate claim on the title "World's Largest Automaker." GM has held that claim for more than 75 years.

Toyota Moves Past GM in First-Quarter Sales

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ROBERT SIEGEL, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.

Toyota said today that it sold more vehicles than General Motors during the first three months of the year. It is the first time that that has ever happened.

NPR's Jim Zarroli reports Toyota is on track to become the world's biggest automaker this year.

JIM ZARROLI: Toyota has been steadily stealing market share from Detroit for so many years that it was just a matter of time before it overtook the biggest automaker. And that's what happened during the first quarter of the year. Toyota said it sold 2,348,000 vehicles, which was about 88,000 more than GM.

If Toyota maintains its lead throughout the rest of the year, GM will lose its place as the world's number one automaker - a position it's held for more than 75 years.

John McDonald is a GM spokesman.

Mr. JOHN McDONALD (Spokesman, General Motors): Well, obviously it wasn't the news that we wanted to hear but both GM and Toyota are growing around the world. And GM also had a record first-quarter sales performance in the global market.

ZARROLI: McDonald says GM is doing well in emerging markets especially in China where it now sells a million cars a year. He also says the company has been shucking off some of its less profitable product lines, so its overall sales volume has suffered.

But as good as GM did last quarter, Toyota did a lot better. Over the past few decades, the company has slowly and methodically built a reputation for high quality, fuel-efficient vehicles. It's taken a big chunk of the luxury market with models like Lexus. And it set the standard in hybrid vehicles for the Prius.

GM still sells more vehicles in the U.S., but auto analyst Maryann Keller says Toyota is growing faster and it's a lot more profitable.

Ms. MARYANN KELLER (Auto Industry Analyst): It's the profits that make all the difference. And Toyota has been more profitable than General Motors for many years.

ZARROLI: Keller says Toyota has made so much money that it's been able to open plants all over the world, from San Antonio to St. Petersburg, Russia. It has slowly and quietly become a major employer in the United States with plants in California, Texas, Kentucky and West Virginia.

Last week, Katsuaki Watanabe, the president of Toyota Motor Corporation, attended the groundbreaking of a new plant just down the road from Elvis Presley's hometown.

Mr. KATSUAKI WATANABE (President, Toyota Motor Corporation): This is indeed a landmark year for Toyota. And today, we celebrate the start of construction for Toyota's newest branch in North America - Toyota Mississippi.

ZARROLI: This rapid expansion has its downside. Analyst Maryann Keller says there's evidence that Toyota may be trying to grow too fast.

Ms. KELLER: Their quality in the United States is not what it used to be. They have suffered enormous numbers of recalls. Their warranty costs are up.

ZARROLI: But for now, Keller says, there's a good chance that Toyota will end the year as the world's biggest automaker. Toyota tried to downplay the milestone today, perhaps because of political sensitivities in the United States. The company said it didn't pay any attention to rankings and was only interested in improving the quality of its vehicles.

Jim Zarroli, NPR News, New York.

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