It has finally happened. After more than 70 years as the world's number one car firm, General Motors has been usurped by its great Japanese rival, Toyota.
According to the first quarter results, Toyota shifted 2.34-million vehicles globally, compared to GM's 2.26-million. Of course, the narrow margin of that sales gap does nothing to illustrate the wildly disparate financial results of the two firms.
Toyota's profit for just the last quarter of 2006 was a whopping $4.78-billion. In that same period, GM only managed a small operating profit as it seeks to turn around horrendous losses in 2005 and 2006, although the American giant's fortunes are looking a good deal brighter now than they were recently.
So what does this mean? Well, nothing much for the moment. Toyota has been the heir apparent to the No.1 spot for some time now, and the fact of it will make little difference in real terms. Toyota is already spectacularly profitable and becoming the globe's biggest car company won't really make a big difference one way or the other.
In the short term, it will make little difference to GM, other than mildly dented pride. The restructuring programme, overseen by CEO Rick Wagoner, is proceeding just fine and GM should return to an overall profit some time in the next 18 months, if all goes smoothly. What will be interesting is what GM will do then. Will it try to keep pace with the Japanese behemoth? Or will a smaller-volume-higher-profit plan be the way Wagoner will go? Our money's on option two...
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