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Good News on Thursday, January 22, 2009 12:48:59 AM
General Motors was eclipsed by Toyota as the world's largest automaker for the first time in 77 years as the troubled American giant Wednesday reported sharply lower global sales.Reeling from plunging sales at home and abroad amid a widening recession, GM said it sold 8.35 million vehicles globally in 2008 compared with the Japanese rival's 8.97 million.
GM's total sales were down 11 percent from those in 2007, reflecting continuing global economic pressures that include tightening credit, falling commodity prices and lack of economic growth.
GM said its nearly three percent growth in both the Asia Pacific and Latin America, Africa and Middle East regions partially offset North America sales that declined 21 percent, and growing pressure in Europe that resulted in seven percent fewer sales. Sales for the fourth quarter were down by double digits in every region and 26 percent globally.
"The challenges in the global financial markets, including credit tightening, the drop in commodity prices, and economic uncertainty continue to negatively impact overall demand for new vehicles," said Jonathan Browning, GM's vice president for global sales.
"For the total global industry, we saw about 3.5 million fewer vehicles sold in 2008 than the previous year."
GM and Toyota ended 2007 neck-in-neck for the world crown, with Toyota selling about 3,500 fewer vehicles that year compared to its US rival.
But both are facing a bumpy ride amid the sharp global economic slowdown stemming from financial turmoil triggered by a US home mortgage crisis.
Toyota said Tuesday its global sales fell four percent in 2008 to 8.97 million vehicles, the first drop in a decade, as demand slumped in recession-hit markets such as Japan, Europe and the United States.
It was the first decline for the Japanese giant in a decade, with domestic sales slipping five percent to 2.15 million vehicles and overseas demand weakening four percent to 6.82 million vehicles.
The drop marked a dramatic turnaround from 2007, when Toyota's global sales had risen six percent to a record high 9.37 million vehicles.
The Japanese maker warned last month that it expected its first-ever annual operating loss as it moved to cut production, jobs and investment amid a slump in sales and a soaring yen.
GM meanwhile will run out of cash if it does not get the second part of the federal bridge loan next month.
GM president Fritz Henderson said the situation was dire for his company, which received a four-billion-dollar emergency loan last month and is due to collect another installment of the bridge loan in February.
"If we don't get our second installment of funding, we'll run out of cash. It's just that simple," Henderson said Tuesday.
He noted that GM would run out of cash well before March 31 when it is supposed to deliver the final draft of its plan outlining the steps it is taking to become financially viable.
But Henderson said he was not concerned about Toyota passing GM in unit sales.
"I actually noticed they passed us in market (capitalization), cash flow and profitability a long ago," he said. "Honestly, this is not a measure I pay a lot of attention to. What's much more important to me is how we make GM successful," he said.
Despite the sagging 2008 global sales, GM set record-setting sales performance in Latin America, Africa and Middle East and Asia Pacific regions.
GM also notched a third consecutive year of two million vehicles sold in Europe.
Sales outside the US now account for 64 percent of GM's sales, up from 59 percent in 2007.
GM sells and services vehicles in 140 countries under 13 brands including Chevrolet, Opel, Wuling, GMC, Buick, Pontiac, Cadillac and Saab.