Reinvented GM revs up to take on Toyota's lead

Toyota clung on to pole position in the global car industry in 2010, despite mass recalls which damaged the Japanese giant's reputation for quality in the all-important US market.

But General Motors – fresh from the $50bn (£31bn) government bailout that saved it from collapse in 2009 – is narrowing the gap. And with just 300,000 vehicles between the two companies' total sales last year, GM is a whisker from reclaiming the top slot it lost to Toyota in 2008.

The Japanese company sold a total of 8.42 million vehicles last year, according to figures published yesterday. Volume sales came in 8 per cent higher than in 2009, with a major boost from developing countries, particularly China.

Toyota did take a hit in the US, after recalling some 10 million cars worldwide after a string of faults including sticking accelerator pedals and braking issues. But the 2 per cent drop in US sales – leaving a total of 1.94 million vehicles – was offset by a 10 per cent boost in Japan, led by the company's best-selling Prius hybrid.

Toyota stressed its focus on quality rather than quantity yesterday. "Being number one in term of sales is not important for us," a spokesman for the company said. "Our objective is to become number one with the customer, in terms of quality and customer satisfaction."

Meanwhile GM saw much stronger growth than its Japanese rival last year. The group sold 8.39 million vehicles in total, some 12.2 per cent more than in 2009, with sales in China and the US both topping 2 million and double-digit growth in five of the company's top 10 markets.

In China, sales rocketed by 28.8 per cent, enough for it to leapfrog the US to become GM's biggest market by volume for the first time. But even in the US, where the company retired four of its brands – including Pontiac and Hummer – in the last 12 months, sales rose by 6.3 per cent to 2.22 million vehicles last year.

In Europe the picture is more mixed. In Britain, the sale of 290,000 vehicles under GM's Vauxhall brand helped push the UK marque ahead of its German counterpart, Opel, to become GM's most successful European market.

GM's European operations have expanded market share in 18 out of 27 European countries, including the UK.

And despite a 2.4 per cent drop in sales of GM Europe's Vauxhall/Opel-branded cars, the combined marque is still GM's second-bestseller globally, after Chevrolet.

But the European business is still loss-making, unlike its newly reformed parent company. And the key German market saw a dizzying 30 per cent drop in Opel sales last year.

The unit costs in the German market present an on-going issue for GM Europe's management, according to industry experts. But the strong performance in the UK will add weight to the case for expanding Vauxhall's car-making facilities, says Professor Garel Rhys, from the Centre for Automotive Research at Cardiff Business School.

"The GME problem is not a European problem, it's a German one," Professor Rhys said. "And the expanding market in Britain gives the GM people here more power to talk, not just about sales but also about production."

Taken together, GM's strengthening global performance is an endorsement of GM strategy under chief executive Dan Akerson, who joined the company in September. "For the last 25 years we've been bombarded with rhetoric from GM that next year will be better – and it looks like it might be finally coming true," Professor Rhys said. "It needed a near-death experience to get it done, but what we are seeing now is the vindication of the new strategy."

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