Volkswagen overtakes Toyota as world’s best-selling automaker
Toyota Motor Corp. lost its title as the world’s best-selling automaker to Volkswagen (VW) Group, ending the Japanese company’s four-year reign, as demand for its flagship Camry sedan waned in the U.S. and sales in China expanded at a slower pace than the overall market.
Toyota’s global sales, including its Lexus, Daihatsu and Hino brands, rose 0.2 percent to 10.2 million vehicles in 2016, the Japanese automaker said on Monday. That fell short of VW Group’s record 10.3 million cars, trucks and buses, a 3.8 percent gain.
By another key yardstick, however, Toyota continues to outperform its European rival. Toyota’s profit was more than double Volkswagen’s in the six months through September, according to data compiled by Bloomberg. Both companies haven’t reported earnings for the quarter ended December 31.
Toyota’s sales last year lagged behind Volkswagen mainly due to the changing dynamics in the both automakers’ largest overseas markets: the U.S. and China. While the Japanese company was hampered by a broad U.S. auto industry sales slowdown, VW benefited from its growth in China and a tax cut there that has stoked consumer demand since 2015.
Looking ahead, Toyota must contend with possible trade tensions as U.S. President Donald Trump pressures foreign automakers to make more cars and trucks in the U.S. while VW faces decelerating demand in China as the tax reduction expires.
Since his inauguration, Trump has withdrawn the U.S. from the Trans-Pacific Partnership trade accord, reaffirmed a campaign promise to renegotiate the North American Free Trade Agreement, involving Mexico, and met with automakers to persuade them to keep production within the U.S.
Toyota will invest $10 billion in the U.S. over the next five years, maintaining its pace of spending during the last half decade, joining other manufacturers with highlighting projects in response to pressure from Trump to create jobs in America. After criticising Toyota’s plans to build a Corolla plant in Mexico, Trump rebuked Japan last week for sending the U.S. hundreds of thousands of cars from what he said were “the biggest ships I’ve ever seen.”
An analyst at Tokyo-based market researcher, Carnorama, Ken Miyao, said: “Trump is a bigger risk for Toyota than for Volkswagen because the German carmaker has a small exposure to the U.S. market. Toyota has made investment to build a new plant in Mexico and will have limited options to appeal to Trump.”
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