Toyota still remains biggest automaker when it comes to practical statistics

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Car enthusiasts, journalists and financial experts pay a great deal of focus on unit-car stats, however investors shouldn’t– just look at Volkswagen‘s rise to the top of the official league table of producers.

Toyota Motor, which surpassed General Motors in the International Organization of Motor Vehicle Manufacturers’ ranking in 2008 for the first time, revealed this week that it produced 10.21 million cars last year. Earlier in January, Volkswagen said it provided 10.31 million vehicles to dealerships for the same year. Assuming deliveries are a good proxy for production, the German automobile maker has left Toyota behind to become, for the first time, the world’s largest automaker.

China is the key factor. Volkswagen and General Motors dominate the Chinese auto industry, each producing over 3 times more cars than Toyota. Considering that the Chinese market is by far the world’s largest and grew 15% in 2016– far quickly than other markets– this was a decisive benefit.

Even now, ranking automakers by the number of vehicles they produce creates little more than bragging rights. The number of vehicles sold would be a much better standard of industrial success than the number produced– if only the market weren’t swarming with reports of manipulated sales stats.

Even production can be considered a slippery concept. As per the figures uncovered by blogger Bertel Schmitt, Toyota likewise makes numerous thousands of vehicles on behalf of other automakers. Include the 212,846 cars Toyota’s Daihatsu unit developed in 2016 for Malaysia’s leading brand, Perodua, and Toyota would still be the world’s biggest automaker.

Really, the industry ought to disregard unit figures completely. This may decrease the incentive to fiddle with them, however generally it would put more focus on success. Not all sales are equivalent: premium brands usually make a number of thousands of dollars for each car; more basic brands only a few hundred, trucks, which are counted in a lot of stats, in some cases upward of $10,000.

Volkswagen’s known hunger for volumes led it to compromise the margins of its name brand, which were simply 1.6% beyond China for the first nine months of 2016. Following unit sales might have also developed the corporate atmosphere that caused the 2015 emissions scandal, which is about to cost the automaker over $20 billion.

What matters more for investors is that Toyota’s stock-market value is more than two times that of Volkswagen’s. In short words, Toyota is still without a doubt the world’s largest automaker.

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