Toyota Motors Corp (NYSE: TM) Beats Volkswagen AG (ETR: VOW) In Global Sales

Toyota Motors Corp (NYSE: TM) barely beat out Volkswagen AG (ETR: VOW) in global sales in the last six month of this year 2014. Toyota attributes this gain to the rising demand for SUVs in the United States in the first half of the year.

According to a statement released by the company, deliveries for Toyota Motor Corp, including its Daihatsu Motor Co. and Hino Motors Ltd (TYO: 7205), increased from 3.8 percent, to 5.1 million vehicles in the first six months of the year. In comparison, Volkswagen had posted sales of 5.07 million vehicles, which included the number of heavy truck units.

The Japanese auto maker has reaped the benefits of the buyers’ trend in the United States to own and drive SUVs, or sport utility vehicles. Currently, the number of SUVs sold in the United States is on track to outsell the number of sedans sold in the United States market for the first time. Toyota’s new Highlander, as well as Lexus’s GX, gained United States market share and increased deliveries. On the other hand, Volkswagen reported a decline in sales, and followed market pressure by announcing that it would launch a mid sized SUV by 2016.

Jim Press, a former sales chief in the United States and now a consultant for the Renault Nissan alliance,stated that Toyota has a much better understanding of the United States market. He said that the Japanese car maker is extremely skilled at releasing products that appeal to customers. Volkswagen, on the other hand, does not have the market completely figured out, and because of that, they have failed to succeed in the North American auto market.

However, the gap between Toyota and Volkswagen is closing. For the second quarter, The German car manufacturer posted deliveries of 2.57 million, not including its Scania AB and MAN SE units. This figure beat Toyota’s deliveries of 2.51 million during the same period.

In Japan, Toyota’s Prius hybrid car saw declining deliveries in Japan due to a governemtn tax that become effective on April 1st. The Prius fell to the number three spot among Japan’s top selling cars in the first half of this year after having led the industry in the prior year.

Yoshiaki Kawano, an analyst for Tokyo based firm IHS Automotive, expressed his surprise at Toyota’s lead over Volkswagen. The negative effect from the tax did not have as big an impact as the company thought. The company’s sales were supported by sales in the US, where the economy is good and consumers are showing preference towards SUVs and trucks.

In the United States alone, Toyota’s Highlander deliveries rose 17% this year through June. RAV4 sales increase 15%. The Japanese company also increased its deliveries of the Lexus GX by more than double.

SUVs accounted for roughly 36.% of new vehicle registrations this year through May in the United States, counting more fuel efficient versions like crossover models. Sedans had held the leading spot for dozens of years, and had fallen from 36.6% to 33.9% of new vehicle registrations this year.