VW fails to dislodge Toyota from the top spot.

Toyota Motor Corp says its first-quarter global sales fell 27% in the first quarter to 1.8 million vehicles, keeping it ahead of Volkswagen AG as the top-selling automaker in the world.

Volkswagen reported Wednesday that its sales fell 11% to 1.4 million as the company sees fewer woes than Toyota and General Motors Corp.

Until last year, GM was the world’s largest automaker by sales. GM has yet to release its first-quarter results.

Toyota and Volkswagen were thought to be in fierce competition over the industry’s top spot, especially as Toyota has posted big sales drops, especially in the coveted and competitive US market.

The year-earlier gap between the two companies in the first quarter was more than 800,000. Now that has halved to 400,000.

Japanese newspaper Yomiuri Shimbun reports that Toyota’s domestic output this fiscal year is likely to plunge below the three million mark for the first time in 31 years, falling to about 2.8 million units, down more than 30% from its peak in 2007.

Meanwhile, people familiar with the situation tell The Wall Street Journal that Toyota is expected to announce a major overhaul of its US operations to revamp the ailing business. For years, the US operations generated some of the company’s biggest profits, but they’re now suffering from plunging sales.

As Toyota faces a decline in demand in its main US and Japanese markets, Volkswagen has seen an increase in sales to some of its key markets, such as China.

Source: Autofile