Toyota Motor Corp. (NYSE: TM) finally become the world's top auto seller this past quarter, toppling General Motors Corp. (NYSE: GM).

If production numbers are any indication, General Motors is fighting a losing battle to regain its top spot.

In 2006, General Motors outproduced Toyota by pumping out 9.18 million vehicles compared with Toyota's 9.018 million. In the first quarter of this year Toyota edged out General Motors with 2.37 million vehicles, slightly above General Motors' 2.34 million.

It should really come as no surprise that Toyota overtook GM, which showed international sales of "only" 2.26 million vehicles in the quarter. Toyota has been expanding while America's powerhouse automakers General Motors, DaimlerChrysler AG's (NYSE: DCX) Chrysler and Ford Motor Company (NYSE: F) have been closing factories and laying off workers.

Over the past few years Toyota has been chipping away at General Motors and everyone knew it was just a matter of time before it overtook the company's sales numbers. The true winner won't be really decided until the end of the year, but it seems rather impossible at this point that General Motors is going to be able to be able to fend off its Japanese rival.

Not sure what General Motors can do between now and the end of the year to hang onto the top annual seller of autos, but it sure isn't looking too good at this point.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.

For decades General Motors Corp. (NYSE: GM) has been losing marketshare as Toyota Motor Corp. (NYSE: TM) has been gaining it. It doesn't take a genius to realize that eventually the lines would cross. And that's what happened in the first quarter.

After decades as the world's leading automobile company, GM is now number two behind Toyota.

On a worldwide basis, Toyota made 2.367 million vehicles worldwide, while GM had expected to produce 2.335 million. In the U.S. market GM was still number one on the first quarter with 22%, Ford Motor Co. (NYSE: F) was second with 17% and Toyota's share was 16%.

As I first posted in January 2006, U.S. auto manufacturers are really finance companies that happen to sell cars. But GM is suffering from its subprime mortgage lending woes and Ford is on what appears to be a never ending downward cycle of cost cutting and market share decline.

Meanwhile, Toyota continues to grow. Its 2006 global production surged 10% to 9.018 million vehicles. The company produces cars with higher initial quality ratings than its peers', its prices are 14% higher and its costs per vehicle are $300 to $500 lower. In 2005, GM lost $2,300 on each vehicle it sold, while Toyota made $1,488.

Since I recommended Toyota on September 30, 2006 in my newsletter, the stock is up 15%. Trading at a forward P/E of 14.6, the company's earnings are forecast to grow 9% to $9.39 next year. While it may be a little pricey, it's not too late to buy it.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

March US auto sales numbers are now all out, and as expected most of the numbers came in negative territory.

Ford Motor's (NYSE:F) sales were -9% to 264,975 total US units, compared to estimates of -17.2%. Ford is actually surprising since it was the one expected to have the largest drop and may not have that much to look forward to until this summer when its 2008 Ford Taurus is reintroduced. March total sales in 2006 were also the highest month of the year in 2006.

DaimlerChrysler (NYSE:DCX) posted sales at -5%, but they were really -8% on an adjusted basis for similar number of selling days. Sales were expected to be -6.2%. Things could have been worse considering that car buyers don't know what brand they will ultimately be owning if they go for a Chrysler. If they are in a sell-off or if the brands get split up, it will be interesting to see what happens as to how they calculate sales.

General Motors (NYSE:GM) said its sales -7.7% but retail was -6.2%. Sales were expected to be -1.2%. US trucks were -11.3% and its cars were -1.4%. The bright spot for GM is its Chinese growth that Doug McIntyre discussed this morning.

Toyota Motor (NYSE:TM) was the hands-down winner at +11.8% (+7.7% adjusted for the one day extra) in sales, although estimates were expected to be +8.8%. We'll see how this does through time as trucks become more and more prevalent.

Jon Ogg is a partner in 24/7 Wall St., LLC; he does not own securities in the companies he covers.

DaimlerChrysler AG (NYSE:DCX) is expected to shut plants in Delaware, Michigan and Missouri as part of a massive cost-cutting program that's due to be announced today that likely will eliminate 10,000 jobs. Officials in the affected states won't be able to get the automaker to change its mind.

The Delaware plant produces models such as the Dodge Durango and Chrysler Aspen that people don't want. Workers in Michigan make 4.7 liter V-8 engines that go in slow-moving trucks and the St. Louis plant is one of three than make the Ram pickup truck, the Associated Press said.

The automaker has little choice to shut it and other plants in Michigan and St. Louis in order to slash costs so that it can compete more effectively against the Japanese. Government officials will no doubt plead their case to the automaker, dangling all sorts of tax breaks and economic-development incentives. It's a waste of time.

Chrysler lost $1.48 billion last year and revenue fell to $62.2 billion. That's a situation that can't continue.

There's little that government officials can do to save the plants other than to give the displaced workers the support that they need.

The Wilmington News-Journal points out that the plant in Delaware offered people without education, good paying jobs that enabled them to join the middle class. Those opportunities were plentiful in the automakers 20 and 30 years ago. They aren't today.

Thousands of jobs are being eliminated at Chrysler, Ford Motor Co. (NYSE:F) and General Motors Co. (NYSE:GM) I don't think that many of the affected workers will wind up earning close to the salaries that they currently get. It's a very sad situation but it's necessary for both the automakers and their long-suffering shareholders.