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Last Updated: Tuesday, 20 December 2005, 10:41 GMT
Toyota on target to overtake GM
Toyota Prius
Japan's Toyota is speeding ahead of its rivals
Toyota has said it expects to boost output by 10% next year, a level which could see the company overtake General Motors as the world's biggest carmaker.

Japan's leading car firm forecast that it would build a record 9.06 million vehicles in 2006, on the back of strong demand across the world for its cars.

The prediction comes as US rivals GM and Ford struggle to reverse declining sales and profits.

Toyota overtook Ford to become the second-biggest carmaker in 2003.

The company has been investing heavily in plants in the US, while earlier this month it began production of its Prius hybrid car in China.

'Lots of problems'

Although GM is expected to increase production over the coming year, analysts broadly agree that it is only a question of time before the troubled US giant is shunted into second place behind Toyota.

We don't want to be focused on whether we're the number one seller in the world - there are still lots of problems we need to fix to do our job
Katsuaki Watanabe, Toyota President

GM does not release annual production forecasts, but analysts expect the US firm to produce 9.08 million vehicles by the end of 2005.

"Toyota will probably be the largest producer in the world at the end of 2006," said Richard Hilgert, an analyst at Fitch Ratings.

Toyota's profits already dwarf those at GM. The firm is forecast to earn more than $10bn ($5.6bn) for the year to March 2006, while GM has lost more than $4bn so far this year.

However, Toyota's boss Katsuaki Watanabe played down expectations that his company would eventually become the world's biggest carmaker.

With growth in the North American market seen as key for the Japanese carmaker, Toyota is keen to avoid stoking US resentment in face of the declining fortunes of GM and Ford.

"We don't want to be focused on whether we're the number one seller in the world," Mr Watanabe said. "There are still lots of problems we need to fix to do our job."

Shares in Toyota closed up 0.7% at 5,780 yen at the close of trade on Japan's Nikkei index on Tuesday.




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