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Toyota (TM)
Toyota Revs Up in Hopes of Beating GM
Toyota gave its investors an enjoyable Christmas present yesterday, by announcing its expected automobile sales for this year, as well as its target sales for next year. If Toyota manages to meet all of its expectations, they could beat General Motors (GM: Charts, News, Offers) this year, and steal the title of world's largest automaker. Investors will be eagerly awaiting the news, as the final sales figures for the year should be available sometime in January. Does Toyota have a chance at overthrowing their long-standing rival?
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These two companies have been competing closely over the past year. GM has been the industry leader for an astonishing 76 years, continually leading the market in auto sales. In recent years, however, Toyota has been approaching GM's numbers, boosted particularly by the many fuel-efficient cars which the company produces. Demand has been growing in the United States, and across the world. Earlier in the year, Toyota managed to beat GM in first quarter sales, and held their lead over the following three months as well, but so far Toyota has never sold more cars than GM over a full year.
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Toyota has predicted that they will sell 9.36 million vehicles this year. GM had earlier estimated that they would sell 9.3 million vehicles, but have not made any recent comments or adjustments to their goal. After the first three quarters, Toyota's sales figures are only slightly behind GM - Toyota reported 7.05 million vehicles sold so far while GM has reported 7.06 million sold. Since the companies are so close, it is possible to imagine that either company could easily be the leader at the end of this year.
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What has got investors more excited, however, is Toyota's sales projects for 2008. Toyota has estimated sales of 9.85 million vehicles next year, a 5% increase from their projected sales for this year. These figures, if reached, would break long-standing records. Until this point, the most vehicles sold in a year totaled 9.55 million, sold by GM in 1978, almost 30 years ago. If Toyota reached their projected target next year, they would easily set a new record.
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Toyota seems to be on the brink of bringing down GM as the leader. Even if they don't manage to beat GM this year, their numbers for next year are very optimistic, especially at a time when many are worried about the United States' auto market. Since we have already seen Toyota beat GM over a half-year period, it isn't hard to imagine that they could soon lead GM over the course of an entire year. Whether or not they will be able to a hold a lead, and maintain the position as industry leader is another question, and will undoubtedly depend upon the strides that Toyota takes to continually improve sales, and also the effort that General Motors will surely put in as they attempt to win back the title that could soon be stolen from them.
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