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Reflecting a strong comeback, Toyota has recaptured the title of the world's largest automaker from GM and looks set to repeat the feat in 2013.
IHS Automotive perspective
Robust demand in Asia and a pick-up in North America have helped to drive sales for Japan's big three, offsetting weak demand in Europe and the effects of the Sino-Japanese diplomatic row in the latter part of last year.
The sales numbers mean that Japan's leading automaker is now officially also the world's top-selling automaker, beating rivals General Motors (GM) and Volkswagen (VW).
Although Toyota is also expected to top global vehicle sales this year as it pegs its global sales to rise 2% to 9.91 million units, the equation might just tilt in favour of VW when the German automaker will reportedly add 600,000 units of production capacity – as much as GM and Toyota combined – and is expected to gain the most from a projected rebound in China.
The top three Japanese automakers –Toyota, Nissan, and Honda – all posted record sales during 2012, according to data released today (28 January) and reported by Reuters. Toyota said it sold nearly 9.75 million vehicles globally last year – its highest ever tally and up 22.6% year-on-year (y/y). Overseas sales jumped 19% y/y to 7.34 million vehicles while sales in a troubled home economy recovered by a whopping 35.2% y/y to 2.41 million units, according to Toyota. The numbers mean that Japan's leading automaker is now officially also the world's top-selling automaker, beating rivals GM and VW. Toyota has surpassed GM by a margin of nearly 460,000 units to reclaim the title it lost in 2011 to the US-based automaker, which sold 9.29 million vehicles worldwide in 2012. Meanwhile, German auto major VW moved down to third place with global sales of 9.1 million vehicles, crossing the 9-million-sales mark for the first time last year.
Toyota's domestic rival, Nissan, said it saw a 5.8% y/y rise in global sales to 4.94 million units last year, its all-time high in a calendar year. Nissan's overseas sales increased by 4.9% y/y to 4.28 million units, mainly driven by record sales in one of its key markets, the United States, where sales rose 9.5% y/y to 1.14 million units. Sales in Japan rose by 11.6% y/y to 659,756 units during the year. In its largest market, China, sales decreased 5.3% y/y to 1.18 million units. Sales in Europe decreased 2.4% y/y to 678,697 units, while in all other regions sales increased 21.1% y/y to 949,388 units, mainly due to increased sales in Thailand, Brazil, India, and Australia.
Japan's third-biggest automaker by sales, Honda, sold a record 3.82 million vehicles globally in 2012, up 19% y/y as it recovered from natural disasters and saw sales grow in its largest market, the United States, and key Asian markets, according to the automaker. While it did not specify its overseas sales growth, it sold 745,165 vehicles in Japan, a 48% y/y jump.
However, all three automakers have played down the significance of sales rankings and say they are focused on making attractive products. "Rather than going after numbers, we hope to make fine products, one by one, to keep our customers satisfied. The numbers are just a result of our policy, which will continue unchanged," said Toyota spokesperson Shino Yamada.
Outlook and implications
Robust demand in Asia and a pick-up in North America helped drive sales for Japan's big three, offsetting weak demand in Europe and the effects of Tokyo's diplomatic row with Beijing, which sparked a Chinese consumer boycott of Japanese goods in the latter part of last year. The final sales tally at Toyota has come out bigger than the estimate it gave last month of about 9.7 million vehicles, indicating a powerful comeback after natural disasters in Japan and Thailand disrupted production through 2011 and the massive recall crisis in the US over defective floor mats, gas pedals, and brakes involving millions of vehicles, kept it in the news for all the wrong reasons since 2009. Toyota first overtook GM as the world's largest carmaker in 2008 – a position GM had held for 77 consecutive years. The March 2011 earthquake and tsunami in northeastern Japan hit Toyota hard, prompting GM to reclaim the position for the first time in four years while VW moved up a place to rank second. Nissan, part-owned by France's Renault, warned in November 2011 that its net profit for the fiscal year through March 2013 would be down 20% to 320 billion yen (USD3.52 billion), citing its heavy exposure to the Chinese market. Less affected by the dispute, Toyota hiked its profit forecast to JPY780 billion for the same period, up from JPY760 billion, although it trimmed its annual sales forecast to JPY21.3 trillion.
Toyota is expected to retain the position this year as it pegs its global sales to rise 2% to 9.91 million units, putting it back on track toward its earlier goal of 10 million vehicles that it had been pursuing before being hit by the recall saga. Its sales growth is expected to be sluggish this year amid weak domestic sales after the Japanese government's subsidy programme for eco-friendly vehicles expired in September 2012. Meanwhile, GM and VW are poised to launch aggressive sales campaigns in the US, where the market is recovering, and in China, where the two are expected to have the edge on Toyota on the back of strained Sino-Japanese relations, which led to a 5% y/y decline in Toyota's 2012 sales.
While the race for the top global automaker is expected to revolve around these three firms, the equation might tilt in favour of VW in 2013 when the German automaker will reportedly add 600,000 units of production capacity – as much as GM and Toyota combined – and is expected to gain the most from a projected rebound in China, which will play a key role in automakers' sales this year. Toyota is targeting growth of 7% y/y in China in 2013 with sales of over 900,000 units. In 2012, Toyota originally had a target to sell over 1 million units, which would have been an annual increase of around 10%. This target was not met, but the automaker is still aiming for growth this year. Honda expects a 25% y/y increase in its China sales in 2013, with its annual sales rising to 750,000 units. However, Nissan appears to be wary of making any statements regarding growth forecasts for 2013 in China. Although sales of Japanese brands in China are improving, the Japanese automakers have yet to regain lost market share after consumers moved to South Korean and German brands (see China: 8 January 2013: Japanese automakers determined for growth in 2013 despite drops in 2012, but competition looms).
Japanese automakers also had unfavourable currency translation effects to deal with in 2011, which have eased somewhat now. The yen, after rising to a record high of JPY75.31:USD1.00 in October 2012, has recently fallen to a near-two-year low against the dollar after Japan's new prime minister, Shinzo Abe, reinforced the country's commitment to monetary easing. The yen's recent weakening has also ignited hopes at Toyota that it will report its first parent-only operating profit in five years for the fiscal year (FY) ending March 2013.