Toyota Motor Corp. last week reported that it was taking market share from the world's number one carmaker, General Motors, in its home market.
After passing Ford Motor Co. in 2003 as the world's number two carmaker in annual vehicle sales, Toyota is expected to solidify its position this year and next.
It's conceivable that Toyota, which has set a goal of 15 per cent global market share after 2010, might overtake GM as the world's biggest carmaker. GM controls about 15 per cent of the global market. Toyota has about 10 per cent, but its 15 per cent target would put the company on par with GM, which is losing share to other Japanese carmakers, too.
"Over the past several years, Toyota has been carrying out its strategy surely, rising one step at a time," Nobuaki Yanachi, car analyst at UFJ Tsubasa Securities in Tokyo, said. "It's in a stage when it's preparing for its next big jump."
Toyota plans to begin producing pick-ups at a plant in Texas that will be running next year. It's considering another plant in North America, the world's largest car market, though it hasn't said where.
Toyota, which has tried to produce vehicles in the market where they're sold, has five other car plants in North America, including a joint venture with GM. Toyota is expanding in other markets, with a plant opened this year in the Czech Republic for the European market. It's considering a plant in Russia.
Meanwhile, the carmaker is making headway in China, a market with such tremendous potential that most major producers are trying to tap. Toyota's fourth car assembly plant in China is set to start production next year.
Good mileage, ecological features and reliability are key to Toyota's global reputation. "It's not about looking cool. Toyota appeals to the regular person," said Fumio Otsuka, a 54-year-old computer engineer in Japan, who hasn't owned a vehicle made by another company.
Even so, Toyota has kept a relatively fresh and innovative image, and is pushing into ecological technology. Hybrid cars, including the Prius, Europe's 2005 Car of the Year, deliver the most efficient drive by switching back and forth between a petrol engine and an electric motor. It relies on the electric motor at slow speeds and then uses the engine as speed picks up.
Toyota has sold about 345,000 hybrid cars around the world, a tiny part of its overall sales but more than any other carmaker. Toyota started selling its first hybrid in 1997.
Last year, Toyota sold 7.52 million vehicles around the world, including its truck subsidiary, Hino Motors Ltd, and minicar subsidiary, Daihatsu Motor Co. GM produced 9.1 million vehicles, and Ford sold 6.8 million vehicles.
According to most forecasts, US carmakers are likely to continue losing ground in North American sales to Asian brands.
The comparisons are discouraging for US brands, given the thousands of dollars more per vehicle they spend on consumer incentives versus their foreign counterparts. Toyota's Camry has been the best-selling car in the US seven times in the past eight years, including 2004.
Toyota's other offerings are popular with Americans, too, including the Corolla, the Lexus luxury series, the Tundra pickup and the 4Runner utility vehicle.
The company's US division sold more than two million vehicles last year for the first time in its 47 years. Sales grew 10 per cent.
Toyota is powerful in Japan as well, consistently controlling more than 40 per cent of the market.
CSM analyst Joe Barker said Ford's focus on profits, rather than rankings, seems to make good business sense. But there are repercussions to losing market share.
"If it can be more profitable at number three than at number two, then number three is the right spot for them," Barker said. "The question is this: Can they be more profitable at number three?
"As your piece of the pie gets smaller, there's always a ripple effect. It affects your customers, your dealers, your workers - every facet of your business."
To expand their worldwide share, Ford and GM have to overcome image problems.
Shinya Oda, a 69-year-old machinery employee in Japan, has never thought about buying an American or European car. He has owned more than a dozen Toyota cars. "I trust my Toyota."