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Toyota remains the world’s No. 1 automaker, but its list of problems is growing

Toyota remains the world’s largest automaker for the fourth consecutive year, maintaining its lead over Volkswagen in sales. Despite this achievement, Toyota is facing challenges stemming from controversies surrounding its vehicle inspection practices and ongoing issues with exploding airbags.

In 2023, Toyota reported record sales of 11.2 million vehicles globally, including those from its Daihatsu and Hino lineups, marking a 7.2% increase from the previous year. Meanwhile, Volkswagen announced a delivery of 9.2 million vehicles in 2023, representing a 12% growth compared to 2022.

The competition between Toyota and Volkswagen has been ongoing for years, with Toyota initially surpassing General Motors in 2012 to become the world’s leading carmaker. However, Volkswagen later gained ground and dethroned Toyota in 2017.

Toyota attributed its sales growth to strong demand across regions and the easing of semiconductor shortages. While sales surged by 20.9% in Japan and 4.1% overseas, the company now faces challenges due to concerns over irregularities in certification tests for certain models, particularly those with diesel engines developed by its affiliate, Toyota Industries.

Recent scandals, including the suspension of shipments for affected models and admissions of certification irregularities by Daihatsu, have raised significant concerns about Toyota’s credibility. The company has pledged to take corrective measures and regain trust, including conducting new engine certification tests under regulatory supervision.

Additionally, Toyota has issued warnings to owners in the United States regarding potential airbag defects, urging immediate repairs to prevent serious injuries or fatalities. These recalls add to Toyota’s history of recalls related to faulty Takata airbags and other safety concerns.

Meanwhile, Volkswagen has also seen growth across regions, particularly in Europe and North America, despite facing challenges in the Chinese market. Intense competition in China’s auto industry, exacerbated by price wars and slowing demand, has impacted profitability for Volkswagen and other manufacturers.

In the rapidly evolving electric vehicle (EV) market, both Toyota and Volkswagen are striving to increase their EV sales. While Volkswagen achieved a nearly 35% surge in sales of fully electric vehicles in 2023, Toyota, known for its hybrid cars, sold significantly fewer electric vehicles but remains committed to expanding its EV lineup.

Overall, Toyota’s continued dominance in global sales underscores its resilience amid challenges, but the company must address ongoing issues to maintain its competitive edge in the automotive industry.

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