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TOKYO (Reuters) -- Japan's Toyota Motor Corp. outsold General Motors by around 90,000 vehicles in the first quarter, moving a step closer to unseating its U.S. rival as the world's biggest automaker.

Toyota has been widely expected to challenge 99-year-old GM this year for the top spot in global sales -- a position the Detroit behemoth has held for 76 years -- but the milestone came surprisingly early, industry watchers said.

Both companies reported record sales for January-March, but Japan's top carmaker inched past GM as it ate into the U.S. group's market share on its home turf.

Toyota, maker of the Camry sedan -- the United States' most popular car -- said on Tuesday its global vehicle sales rose 9 percent to 2.35 million units in the quarter.

The tally includes cars sold under the Lexus luxury brand and the youth-oriented Scion badge, as well as vehicles from units Daihatsu Motor Co. and Hino Motors Ltd..

GM, which sells cars and trucks under a dozen brands including Chevrolet, Buick, GMC, Cadillac, Opel and Saab, sold 2.26 million units during the same period, for a 3 percent rise.



"Toyota has had aggressive new model introductions all over the world," said Koji Endo, an auto analyst at Credit Suisse Securities in Tokyo.

"It's achieved growth everywhere in the world, whereas GM's significant growth has only been in China," he said.

Toyota has won fans around the world with affordable cars seen as reliable, durable and fuel-efficient, while GM continued to rely heavily on high-margin but gas-guzzling vehicles to pull it out of financial difficulties.

To keep up with soaring demand, Toyota is adding production capacity in almost every corner of the globe, from San Antonio to St. Petersburg, with an internal goal of taking 15 percent of the global car market by 2010.

GM estimated its share in the first quarter at 13.0 percent, down one-tenth of a percentage point from a year ago.

This year, Toyota has plans to sell 9.34 million vehicles as a group, up 6 percent from 2006. GM does not provide a global sales forecast.

The breakneck pace of growth, however, has presented some hiccups for Toyota in recent years as vehicle recalls climbed to record levels.

Last year Toyota recalled more than a million vehicles in Japan and 760,000 in the United States, raising concerns that the company was stretching itself too thin too fast.

After a series of high-profile recalls including a legal probe into past recall practices, President Katsuaki Watanabe publicly vowed last year to step up Toyota's quality vigilance, assigning two executive vice presidents to oversee the effort.

"The number of recalls remains high," Credit Suisse's Endo said. "Toyota has managed to keep a generally high level of quality standards, but how it copes over the next few years is yet to be seen."

While sales volume is the most common yardstick for a carmaker's size, Toyota dwarfs its rival in almost every other measure. Its market capitalization, at $225 billion, is more than 12 times that of GM's.

Toyota expects to post a net profit of 1.55 trillion yen ($13 billion) for the business year ended last month, probably more than any Japanese company, while GM is struggling to make money. It lost $3 billion in 2006 and $12 billion the year before