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Behind The Wheel

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Oct.27

8:58 AM ET

Monday, 27 Oct 2008

If Toyota Passes GM In U.S. Sales--Does It Mean Anything?

Posted By:Phil LeBeau

Sectors:Oil and Gas | Technology | Automobiles and Parts

Companies:Toyota Motor Corporation | General Motors Corp | Honda Motor Company, Ltd. | Ford Motor Company

This week is not only the last one of the month. It's also the week that could determine if GM holds on to the top spot in monthly auto sales in the U.S.

Initial reports of October retail auto sales show Toyota [TM Loading... () ] out pacing GM[GM Loading... () ] and Ford [F Loading... () ]. If that trend holds for the full month, we could be looking at the day many in Detroit have feared for years.

Toyota's October surge is due to a number of factors, most notably the Japanese automakers ability to offer financing while GM dealers struggle in a tight credit market. I've had a few GM dealers tell me that Toyota pushing 0 % is not a huge deal. Which is interesting since far more have told me they are losing potential sales because they can't get financing for customers. How many of those people went across the street to Toyota is hard to tell.

But even if Toyota out sells GM for October, what does it mean? Yes, there are bragging rights, but beyond that is there a residual carry-over to Toyota being #1 in sales for one month? Yes and No.

Yes, in that Toyota's ascent to #1 would confirm the momentum the automaker has been building for years. And the auto business is very much about momentum. When a company is picking up business, the public notices and even the most stubborn people admit, "maybe I should at least look at those cars and trucks."

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But an October surge by Toyota may not mean much because it's simply one month. GM will still lead the industry for sales this year. When the credit crunch eases, GM dealers should have an easier time getting credit for customers they are now losing. And if GM merges with Chrysler, the automakers share of U.S. sales will jump up to a commanding 30-32%.

So as this last week moves along, and you read more about GM struggling to hang onto #1 in sales, don't look at this as the end of the battle between GM and Toyota. It's one month.