Toyota says it sold 9.75 million cars worldwide in 2012. That's about 450,000 more than General Motors and a 22 percent increase on last year, putting Toyota back on top once again as the world's number 1 automaker.
The turnaround in Toyota's fortunes is a bounceback after a difficult couple of years for the company.
The Asian car giant's image in the U.S. took a battering in 2010 from quality and safety issues, especially the instances of sudden uncontrolled acceleration in some models.
Then in 2011 Toyota was badly affected by the Japanese tsunami, shutting down production at 21 plants in Japan, and flooding also temporarily shut down production at Toyota factories in Thailand.
Toyota is Japan's biggest industrial employer and its biggest exporter of vehicles, so the fact that one of Japan's major companies is doing so well and maintaining dominance in the car industry is of immense importance to the Japanese people, says the BBC's Rupert Wingfield-Hayes in Tokyo.
He says this is especially important when other well-known Japanese companies who were once leaders in their industry such as Sony and Panasonic are struggling to maintain dominance and losing billions of dollars a year.