For the past several months news reports have been focusing on the declining fortunes of the worlds largest automaker, General Motors, as well as on the rise of Toyota to pre-eminence. Many are predicting that this will be the year that Toyota overtakes General Motors in sales while others are expressing caution regarding this assessment. Does it really matter who is number one? In many ways it does. Lets examine the fortunes of the Top Two to determine whether Toyotas quest to overtake General Motors will happen this year.
So, why does it matter who is the top selling automaker in the world? In one word: prestige. Being number one in any category tells consumers that you are at the top of your game. No, there isnt anything wrong with being number two just ask Avis but saying that we try harder doesnt equate into being number one no matter how cute your commercials may be.
General Motors decline combined with Toyotas ascension is remarkable. At one time, General Motors produced well over half of all vehicles sold in the U.S. Today, that number is down to about 25% and falling. Toyota, on the other hand, has gone from being the maker of poor quality cars to being...