KAI RYSSDAL: We’ve been telling you for years about Detroit’s problems. Falling market share in the face of foreign competition. And rising costs to take care of workers and retirees. Every time we do it, we identify General Motors as the world’s biggest car maker.
Well, we can’t say that anymore. Toyota took the top spot last quarter, bumping GM down after more than 70 years on top.
Now, yes, this is just one quarter’s worth of sales, but all signs are Toyota’s going to be number one for a while. Marketplace’s Jeff Tyler reports.
JEFF TYLER: Being number one in sales usually earns a company some bragging rights. But Toyota is having none of it.
SONA ILIFFE-MOON: It’s really not part of our DNA. Over here at Toyota, we believe in kaizen — it’s the Japanese term for continuous improvement.
That’s Toyota spokesperson Sona Iliffe-Moon, who downplays the company’s achievement.
ILIFFE-MOON: Ranking isn’t really important to our customers. So we aren’t focused on our ranking. But rather, fulfilling our customers’ needs.
Some suspect the company’s modesty is driven by more than corporate culture.
John Novak is an equity analyst with Morningstar.
JOHN NOVAK: They’re fearful of a political and/or a consumer backlash for them being seen as someone who’s toppling an American icon.
Novak says Toyota does appear strong enough to extend its winning quarter and become the best-selling car maker for the whole year.
NOVAK: What’s clear is that on their current trajectories, Toyota will overtake GM on a full-year basis at some point, probably this year.
But, Novak says, the number of cars sold is not the benchmark at Toyota.
NOVAK: The company is more focused on profits, and not unit sales. You can sell as many units as you want, but if you’re not profitable, it doesn’t mean much.
It’s those profits that have made Toyota the number one auto stock on Wall Street. Based on the market capitalization — that is, the number of shares multiplied by the stock price — Toyota is valued at almost 12 times as much as GM.
I’m Jeff Tyler for Marketplace.
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