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Toyota Sets Sights on Pole Position Among Automakers

Tuesday, 6 Feb 2007 | 6:36 AM ET

It seems only a matter of time before Toyota Motor takes the title as the world's top automaker, by any measure. The Japanese automaker is even entering a car in the Daytona 500 this year.

But the company could face a few speed bumps this year, despite posting a 19% rise in quarterly profit.

Toyota’s market cap dwarfs that of GM and in “any measure apart from production volume Toyota is leading in almost every segment,” Graeme Maxton, director at the Economist Intelligence Unit, told "Worldwide Exchange."

Toyota Takes Top Spot?
There is no question that Toyota is the most successful car company in the world, but their biggest challenge this year is going to be the market and the exchange rate, Graeme Maxton, Director, Economist Intelligence Unit, predicts regarding Toyota's outlook. CNBC's Christine Tan Reports.

Early adoption of the smaller, greener strategy has been paying off for Toyota as Detroit's Big Three have been grinding their gears. But that doesn’t mean Toyota is carefree.

“I have two major concerns," Maxton said. "Although they are taking share in the U.S., the U.S. market is likely to go down quite heavily.”

In addition, Toyota’s prediction for the dollar to rise is problematic, he said.

“I’d certainly question their assumption about exchange rates," Graeme said. "We certainly think the dollar is going to fall in value and that means a stronger yen which means their profitability is going to fall.”

A dwindling U.S. consumer would hit the likes of GM and its U.S. counterparts as hard as Toyota, so it would make sense for the Japanese automaker to be hedged, he added.

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