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Toyota sold more vehicles globally in the third quarter of this year than Ford Motor Company, making it the world’s second-largest carmaker after General Motors in that period.

The milestone came two months after the Japanese carmaker leapfrogged Detroit’s number three carmaker Chrysler - the U.S. unit of Germany’s DaimlerChrysler - in terms of sales.

Toyota sold 166,000 more vehicles than Ford did in the third quarter, according to Reuters. Toyota’s total global sales were about 1.57 million.

That is still way behind GM, which sold 6.4 million worldwide in the same period.

GM regards Toyota as its main competitor globally. However, industry observers say Toyota’s robust profits, huge cash pile, efficient manufacturing systems and extensive product research and development means it has the capacity to challenge GM for the top slot.

GM has in recent years adopted many of Toyota’s “lean manufacturing” processes.

This has put it ahead of Ford and Chrysler as all three battle to reduce manufacturing and other costs.

However, its single biggest competitive disadvantage against Toyota is the high cost of employee and retiree healthcare, as well as underfunded pension liabilities.

Although Ford remains ahead of Toyota in sales this year to September, Toyota has a chance to retain its lead if Ford lowers production as forecast in the fourth quarter and can maintain current sales momentum.

Irving Miller, group vice-president of communications for Toyota North America, said: “We prefer to look at our performance.

“But if the trend continues where our capacity increases and our products are accepted the way they are now I think there’s a good possibility that we surpass Ford.

“I don’t know when that will be, though.”

Toyota’s market capitalization is larger than the three Detroit carmakers combined.

However, some observers point out that profitability is a more meaningful way of ranking the carmakers.

On that, Toyota is already number one, last week reporting a record $7 billion first-half operating profit.

Art Spinella, the president of Oregon-based consulting CNW Marketing, said: “Sales is one of those battles for bragging rights but you’ve got to make profits. And Toyota is proving that it can make more money than GM.”

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.

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