GM Slides to 3rd as VW Nabs 2nd Spot in Global Sales

Toyota firmly in the lead.

by on Oct.16, 2014

Vehicles like the new Golf "family" have helped Volkswagen grow sales worldwide.

For three-quarters of a century the world’s best-selling carmaker, General Motors has slipped another notch down the automotive ladder, Volkswagen AG pushing past to become number two in the industry pecking order.

With the first nine months of the year behind it, the German maker sold 7.4 million passenger vehicles compared to 7.37 million for GM. Though it hasn’t reported its numbers for the first three quarters yet, Japanese giant Toyota Motor Co. is expected to maintain its hold on the industry’s number one spot.

Stay in the Lead!

Industry analysts say the real race, going forward, is likely to be between Toyota and VW, the German automaker laying out an aggressive expansion program it hopes will let it become king-of-the-automotive-hill before the end of the decade.

GM spend 75 years as the industry leader, pushing past Ford in the late 1920s and then never looking back as it continued to build its global dominance. At one point in the 1960s, in fact, the Detroit maker was so big, controlling almost two-thirds of the American auto market, that the U.S. began preliminary anti-trust efforts that would have broken GM up into two companies.

It needn’t have bothered. By the late 1970s, its dominance in the U.S. was shaken by the growing presence of import makers like Toyota, Nissan and Honda at the low end, and German manufacturers such as Mercedes-Benz and BMW in the luxury segment. GM’s overseas operations also began losing ground to increasingly aggressive competitors like Volkswagen.

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The Detroit giant was already in second place globally by the time it filed for bankruptcy in 2009, though it briefly regained the lead following the devastating Tohoku earthquake and tsunami in 2011 that all but shut down the Japanese auto industry for several months.

But Toyota came roaring back the following year. The maker has had its own setbacks, including a political crisis in China that led to a boycott of Japanese brands. Nonetheless, Toyota has maintained its lead and is this year expecting to become the first automaker ever to top the 10 million sales mark, up from last year’s oh-so-close finish at 9.98 million.

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Volkswagen has also been gunning to break the 10 million mark but appears to be on a pace that would see it fall just short this year. Longer-term, it is betting it can catch up to Toyota, however.

Where Toyota has continued to struggle in China, VW this year has firmly entrenched its lead in the world’s largest automotive market, nudging by rival GM. VW is targeting growth in a number of other markets, but its efforts haven’t been without a few setbacks, notably in the U.S. where it is likely to record its third consecutive annual sales decline if it can’t reverse the trend set during the first nine months of this year.

VW’s growth has been further fueled by its appetite for acquisitions. The maker now operates a dozen different car brands, as well as commercial truck and motorcycle operations. On the passenger car side these range from down-market marques like Seat and Skoda to high-line names such as Bentley, Audi and Lamborghini.

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GM, on the other hand, has eliminated five of its home market brands since the beginning of the 21st Century: Oldsmobile, Saab, Saturn, Hummer and Pontiac.

The Detroit maker has posted major gains in China, lagging just narrowly behind Volkswagen this year. But it is struggling in a number of other key markets, notably in Europe where it has lost money for the last 14 years. GM did announce this month that it soon expects to be back in the black, though the growth of sales for its European-based Opel brand doesn’t appear likely to let it catch back up to VW on a global basis.

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