Toyota overtook GM in first-half world sales

DiGiovanni said GM also struggling in Japan, where consumer confidence is at record lows and sales have hit their lowest levels since 1982. Industrywide sales in Western Europe also fell 7 percent, the result of high fuel prices and falling home values.

Toyota hasn’t been immune to those troubles. Toyota’s profit for the January-March quarter sank 28 percent from the previous year as a strengthening yen and lagging North American sales chipped away at the Japanese automaker’s earnings. The company also said it expects sales to drop for the first time in nine years for the fiscal year that ends in March 2009.

Toyota’s U.S. sales also took a surprising 21 percent dive in June, prompting the company to make major manufacturing changes at its U.S. plants. Toyota plans to suspend truck and SUV production for three months starting in August and will start building the Prius hybrid in the U.S. for the first time in 2010. U.S. Prius sales have fallen in recent months as Toyota has failed to keep up with demand.

Toyota also said last week that its European sales fell 7 percent in the first half, a dip it vowed to reverse with a series of new, more fuel-efficient products. Merkle said that unlike the U.S., Toyota has a lot of room to grow in Europe.

“They’re finally getting the right product mix there,” he said.

Toyota also is an aggressive player in emerging markets. Last week, it said it is acquiring land in Brazil for a second plant that would start making compact vehicles as early as 2011. GM said its sales in Brazil were up 20 percent in the second quarter.

Toyota has said it expects to sell 9.85 million vehicles worldwide this year, up 5 percent from last year. But it may lower that target when it updates its strategy next month. GM doesn’t release full-year sales forecasts.

DiGiovanni said GM now expects the first quarter of 2009 to be the low point of the U.S. housing crisis, and that home prices and auto sales will see some recovery after that. He said oil prices also are starting to show some signs of stability, which could give a big boost to consumer confidence.

“If people see the price stays in some finite range, they feel better about the future,” he said.

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