Despite a challenging economic environment, Japanese automaker Toyota Motor Corp. (NYSE: TM) has been continuing its strong competition with rival General Motors Corp. (NYSE: GM) for the title of the world's largest automaker. As results show, the good times are rolling for Toyota which earlier today posted an increase of 2.7% for its global sales, for a total of 2.41 million vehicles during the first-quarter.

On the other side of the coin, GM announced a decline of almost 1% in its total sales. Last year, General Motors held the crown in global sales, but on the other hand Toyota was the leader in global vehicle production. Both companies benefited from strong demand outside the United States.

General Motors has said that strong overseas sales weren't enough to overcome a weak North American market. The company saw a 10% drop in first-quarter sales in its home North American market as high fuel prices and worries about housing and the credit crunch pressured consumers. Regardless of the weak results, GM restated its desire to "win, and we'd like to be No. 1 in sales at the end of the year."

Despite the fact that GM managed to edge Toyota in global sales in 2007, the Japanese auto maker has been gaining steadily on its overseas competitor. The recent surge in oil prices helped Toyota to increase sales of its more fuel efficient cars, such as the Corolla model.

Toyota's plans of global domination have been consolidating over the past months with the company's goal to improve its ability to run efficient operations in countries outside of Japan. The automaker's ambitious target to gain ground in new markets proved their efficiency in its overall sales. From this point of view, some analysts believe is just a matter of time before Toyota beats General Motors in both annual global sales and production.

Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.