Toyota forecast has GM trembling...

Toyota’s production forecast for 2006 already has General Motors, the world’s No 1 car maker, quaking in its boots.

The Japanese giant has announced that it plans to build a record 9.06 million cars next year, according to a Reuters report, and this tally may see it leapfrog GM in the global auto manufacturers’ pecking order. GM is expected to produce 9.15 million cars and trucks in ’06, but this forecast may well be revised downward, based on demand (or lack of) for its products.

If Toyota does indeed topple GM from the top of the car-making tree in ’06, it would mark the end of a 70-year domination by the US-based juggernaut, which builds cars in every continent (barring Antarctica) under a number of brand names.

However, the bottom line is that it’s a question of when, rather than if, Toyota ascends the throne -- all that remains to be seen is whether it happens in 2006 or 2007.

GM has been hobbled in the US in recent times by high healthcare costs for its workers and a vehicle line-up that lately hasn’t hit the mark in consumers’ eyes. This prompted the GM Employee Discounts scheme earlier this year, a measure that propped up sales temporarily.

Holden has since adopted the same employee discounts promotional strategy here, but some analysts have suggested it will impact adversely on the brand’s residual values.

Meanwhile, news of Toyota’s 2006 production forecast has seen GM shares slip by $US1.05 ($AUS1.43) -- or five per cent -- to $US19.63, reportedly its lowest point since 1987.

This setback comes on top of earlier declines that have resulted in GM shares plunging by nearly 50 per cent this year. GM has been left with no alternative but to slash 30,000 jobs and close 12 facilities in North America.

Adding to GM’s woes, a strike at bankrupt Delphi, a former subsidiary of GM, could shut down plants and force the automaker to burn through billions of dollars a week, according to analysts.

Several industry observers say the cost-cutting efforts are not enough to turn the tide for the car-making giant until it starts regaining market share. A strong product line-up is the key.