Toyota has forecast an 11% increase in vehicle sales outside Japan for 2004.

This stunning recent performance should see it surpass Ford as the world's second biggest automaker by vehicle sales. Part of the secret of Toyota's success has been the creation of a brand synonymous with quality and reliability. However, as its Lexus arm has shown, it can also succeed in the premium end of the market. Its rivals could learn a lot from its quality-first approach.

Encouraged by yet more positive figures, Toyota's challenge to the two market leading auto giants, GM and Ford, is seemingly relentless.

Toyota expects sales outside Japan to increase by 11% this year to reach nearly 5 million units, with approximately 40% of these headed for the US market. The company, which sold 6.49 million vehicles in 2003, is closing in on Ford's figure of 6.72 million vehicles last year, and seems set to surpass it this year.

Toyota has achieved its results despite a slowing global market and intense competition from rival manufacturers in the US and Europe. Its success can be attributed to several factors, but one of the most important is the brand image that the company has created for itself, especially in the US market.

Toyota has won over American drivers by producing cars of considerable quality, meaning that the Toyota brand has a strong reputation upon which it can build. Although few would suggest that Toyota's mainstream models are especially innovative in a design sense, they are well equipped and reliable.

Alongside the staple Toyota range, it has also developed the strategically useful Lexus brand in an attempt to capture the premium end of the market. Lexus, although some way from competing with established rivals such as Mercedes and BMW, is further evidence of Toyota's burgeoning self-confidence. By developing a luxury car brand, Toyota clearly feels it has the ability to succeed with its own offering in this segment, in contrast to Ford for example, which entered the luxury sector by acquiring other brands, notably Jaguar.

Having laid such strong foundations for growth, Toyota is likely to challenge General Motors in the next few years for the top sales spot. Its strategy of cultivating a strong brand name and developing innovative and efficient production methods to produce high quality cars more cheaply has served it remarkably well. Other manufacturers should take note.

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