Toyota said Monday its group sales in 2010 rose, enabling the firm to narrowly retain its title as the world's biggest automaker despite a global safety crisis that damaged its brand image.
But analysts warn that after a year that saw the recall of millions of vehicles, a wave of lawsuits and record fines, the company is likely to soon surrender that lead as it battles to regain consumer trust overseas.
In 2008 Toyota ended General Motors' 77-year reign as the world's largest automaker but the road has been a bumpy one for the Japanese giant, facing the impact of the economic crisis, recalls and recently a strong yen.
Despite such challenges Toyota's global sales rose eight percent year-on-year to 8.418 million vehicles, narrowly beating the 8.39 million sold by a resurgent General Motors in 2010.
"Being number one in term of sales is not important for us," Toyota spokesman Paul Nolasco told AFP. "Our objective is to become number one with the customer, in terms of service and customer satisfaction."
The Toyota group, including small car producer Daihatsu Motor and truckmaker Hino Motors, saw its Japanese sales jump 10 percent while foreign sales rose seven percent.
Toyota Motor alone sold 7.528 million vehicles, up eight percent from the previous year.
The firm's Prius hybrid broke the Japanese sales record for a single car model in 2010, helped by a popular government subsidy for green vehicles, according to a Japanese industry group.
But last year ended with Toyota losing market share to rivals in the United States - its second largest market by volume - even as overall sales recovered.
General Motors, which emerged from major restructuring in 2010, on Monday said its global sales increased 12.2 percent in 2010, boosted by record deliveries in China.
Analysts say the iconic Japanese firm is likely to soon surrender the crown of top automaker back to GM, as the US giant rapidly improves its business at a time when Toyota is exposed to declining domestic demand.
"Toyota has struggled to increase its domestic sales. Its North American market share is shrinking," said Mamoru Kato, senior analyst at Tokai Tokyo Research Center.
"It surely has failed to meet the pace of recovery in that market. Toyota has also failed to take measures for emerging markets," he said.
Analysts warn the full impact of the recall of nearly nine million vehicles worldwide due to safety defects related to brake and accelerator issues may not yet be fully felt.
As criticism mounted of its slow response and bureaucratic inflexibility, Toyota tightened its recall policy and by November had pulled nearly 13 million vehicles over a range of issues.
The crisis prompted US congressional investigations as the Japanese firm was hit with penalties totalling $48.8 million, including $16.4-million to settle claims it hid accelerator pedal defects blamed for fatal accidents.
In response the automaker has added an extra four weeks to new vehicle testing, sped up the decision-making process and appointed regional quality control officers.
Akio Toyoda, the publicity-shy grandson of the company's founder, was thrust into the spotlight by the recalls amid criticism that he had not been proactive enough, eventually appearing before US lawmakers in Washington.
The automaker had previously said it expected global sales to reach 8.61 million vehicles for 2011.
Toyota shares close 1.33 percent higher in Tokyo trade Monday.