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Toyota still biggest automaker despite recalls

TOKYO, Jan 24, 2011 – Toyota said Monday its group sales in 2010 rose despite a global safety crisis that damaged its brand image, enabling the firm to narrowly keep its top spot as the world\’s biggest automaker.

But analysts warn that after a year that saw the recall of millions of vehicles, a wave of lawsuits and record fines, the company is likely to soon surrender that lead as it battles to regain consumer trust overseas.

Toyota\’s global sales rose eight percent year-on-year to 8.418 million vehicles, narrowly beating the 8.39 million sold by a resurgent General Motors in 2010.

"Being number one in term of sales is not important for us," Toyota spokesman Paul Nolasco told AFP. "Our objective is to become number one with the customer, in terms of service and customer satisfaction."

The Toyota group, including small car producer Daihatsu Motor and truckmaker Hino Motors, saw its Japanese sales jump 10 percent while foreign sales rose seven percent.

Toyota Motor alone sold 7.528 million vehicles, up eight percent from the previous year.

The firm\’s Prius hybrid broke the Japanese sales record for a single car model in 2010, helped by a popular government subsidy for green vehicles, according to a Japanese industry group.

But this it is not the time to celebrate for the Japanese automaker as it continues to lose US market share to American and South Korean rivals, said Mamoru Kato, senior analyst at Tokai Tokyo Research Center.

The iconic Japanese firm is likely to soon surrender the crown of the top automaker back to GM, as the US giant rapidly improves its business at a time when Toyota is exposed to declining domestic demand, he said.

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Toyota overtook GM as the world\’s top vehicle maker in 2008.

"Toyota has struggled to increase its domestic sales. Its North American market share is shrinking. It surely has failed to meet the pace of recovery in that market. Toyota has also failed to take measures for emerging markets," he said.

Analysts warn the full impact of the recall of more than eight million vehicles worldwide due to safety defects related to brake and accelerator issues may not yet be fully felt.

Last year ended with Toyota losing market share in the US — its second largest market by volume — even as overall sales recovered.

As criticism mounted of its slow response and bureaucratic inflexibility, Toyota tightened its recall policy and by November had pulled nearly 13 million vehicles over a range of issues.

The crisis prompted US congressional investigations as the Japanese firm was hit with penalties totalling $48.8 million, including $16.4-million to settle claims it hid accelerator pedal defects blamed for fatal accidents.

Toyota president Akio Toyoda, the grandson of the founder, went to the United States early in 2010 to speak before Congress and meet Toyota workers and dealers to apologise amid intense and critical media coverage.

The automaker had previously said it expected global sales to reach 8.61 million vehicles for 2011.

Toyota shares close 1.33 percent higher in Tokyo trade Monday.

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