General Motor Corp, once the symbol of US industrial might, has escaped by a whisker from losing its title as the world's biggest car maker. Toyota Motor Corp sold 9.366 million vehicles in 2007, just 3,000 short of the numbers reported by General Motor. 

Toyota has already surpassed Ford Motor for the title of No. 2 automaker in US sales.

In sheer numbers of vehicles produced, Toyota has, however, overtaken General Motors. The top Japanese carmaker produced almost 9.498 million vehicles in 2007, overtaking US rival General Motors which produced 9.284 million vehicles worldwide in 2007.

GM has been able to beat Toyota in sales due to strong overseas sales in China, Latin America, Africa, Russia and the Middle East. The company's sales doubled in Russia while its sales in China broke the 1 million mark for the first time in 2007. Its sales increased 19 percent in regions that include Latin America, Africa and the Middle East.

The story in GM's own home turf, the US market, however, was just the opposite where it has been struggling with job cuts, losses and plant closures.

With gas prices shooting through the roof and buyers looking for cars that offered good mileage Toyota has taken the lead in the US on the back of eco-friendly hybrids such as its Prius, which runs on a gas engine and electric motor. Toyota in fact sells more hybrids in the US than any other automaker.

GM suffered an almost 6 per cent fall in sales in 2007 in the US, which allowed Toyota to catch up. Toyota itself saw a 3 per cent sales rise in US sales, its lowest gain since 2002 in a market that has seen double-digit annual growth here the last three years.

The two companies have been in a close race for the global sales title the whole of 2007. In the first and second quarter of 2007 Toyota maintained its lead while GM made a comeback with strong third quarter results.
 
GM has been the world's top auto seller for 77 years. Third on the Fortune 500 list of US corporations, it remains the leader in the US. But its market share has dropped dramatically from about 35 per cent in 1990 to about 24 per cent in 2007.

Analysts say GM's decline in US sales was mainly due to the fact that the company intentionally cut incentives and reduced low-profit sales to rental car companies and sales to large, bulk buyers.

In the coming years competition in the emerging markets is likely to determine the winner in the long run.

Meanwhile Toyota is aggressively expanding overseas production and is forecasting robust growth for this year. It is aiming to sell 9.85 million vehicles, up 5 per cent from 2007.

In India Toyota is planning a similar path as global car makers Suzuki and Hyundai, and is actively looking at making the country an export hub for its small car. The Japanese car major is looking at scaling up investments and capacity at its existing facility in Bangalore.

Toyota officials recently said, "Toyota is considering doubling investments and capacity in the country. It is looking at making India an export hub for their small car."

Last year in August, the company's chairman Fujio Cho had said India could be the first market from where their global small car may be launched.

Toyota has also been growing fast in China and especially so after since the opening of a new Camry plant in Guangzhou in May, 2006. 2007 numbers indicate that Toyota may sell around 500,000 vehicles in China a rise of more than 50 per cent against 2006 and above its own 2007 projection of 420,000. Toyota is also aiming to double its sales in China by 2010 to more than 1 million.

Other Japanese carmakers like Nissan and Honda are also revving up plans for the Chinese market. Nissan's passenger-car sales increased more than 30 per cent in 2007, to around 300,000. The company is targeting to maintain its market share at more than the current 5 per cent. Honda launched its Accord in China in December 2007 and hopes that the car will help sales rise 17 per cent in 2008 to 490,000.

 All these may give GM tough competition and could end up eroding its global  number one position.