GM and Toyota battle for world supremacy—in the China market

General Motors has been the undisputed number one car maker in the world for many decades, but this position is now under attack from Toyota. Although it fell short of GM in annual sales in 2006, Toyota surpassed its big North American rival in quarterly sales in the January to March period of this year. Based upon recent announcements by Toyota, it appears that the company will be the undisputed global leader in unit sales by 2009. Interestingly, the final battleground will not be in GM’s home market in the United States where Toyota has already made significant inroads, but in the fast-growing, developing markets of China and India.
According to The Wall Street Journal, Toyota said that it aims to sell 10.4 million vehicles worldwide in 2009, making it the first car maker to sell 10 million units. This compares to estimated sales of 9.34 million units in 2007 and expected sales of 9.8 million vehicles in 2008. Despite slumping sales in the U.S. market, GM has managed to stay ahead of Toyota due to its strong position in China, where it is one of the country’s fastest growing brands. GM, which entered the China market in the early 1990’s, is the number two producer with over 10 percent of the market.
But GM’s Japanese competitor is coming on strong in both China and India. Toyota currently has a 4 percent market share in China, as well as a 4 percent market share in India. By 2010, Toyota plans to quadruple sales in India to 200,000 units, WSJ reported, and it expects to sell more than one million vehicles in China. That would give Toyota an estimated 10 percent of the China market in that year.
Who would have guessed that the battle for global leadership in one of the world’s largest industries (automotive accounts for over 10 percent of global GDP.), between one of the largest U.S. companies and one of the largest Japanese companies, would be determined by the China market?



