General Motors also released a new tally Monday for its global 2010 sales, at 8.39 million vehicles, slightly fewer than Toyota's number, but a dramatic 12 percent rebound from 7.48 million vehicles the year before.
The race between the two giants appears to be getting close, with the chance the tables could be turned, seeing GM once again rising to the top.
"General Motors is going strong, and it's a sure sign of its re-emergence," said Yasuaki Iwamoto, auto analyst with Okasan Securities Co. in Tokyo.
Meanwhile, Toyota wasn't showing much growth in North America — and growing slower in China than GM — partly because it lacks the US automaker's extensive model lineup such as large-size sedans, he said.
Toyota's global sales, including truckmaker Hino Motors Ltd. and Daihatsu Motor Co., which makes small cars, rose 8 percent from 2009, driven by solid sales growth in China and other Asian nations, the Japanese manufacturer said.
Toyota Motor Corp. dethroned General Motors as the world's No. 1 automaker in worldwide vehicle sales in 2008 — a position GM held for nearly eight decades. Since then, General Motors, now called General Motors Co., was bailed out by the US government and underwent restructuring after a brief period in bankruptcy protection.
George Hansen, a GM spokesman in Tokyo, played down the importance of Toyota's bigger sales numbers.
"We don't focus on who is No. 1," he said of the so-called "new GM."
Still, General Motors achieved double-digit jumps in five of its top 10 markets, including a 28.8 percent increase in China, where it sold 2.35 million vehicles, more than it sold in the U.S.
Toyota, in contrast, sold just 846,000 vehicles in China.
GM also marked a 12.4 percent sales rise in Russia and a 10.4 percent rise in Brazil. GM's sales in the US grew 6.3 percent to 2.21 million vehicles.
Toyota said it was not concerned with beating GM.
"Our objective is to become No. 1 with the customers," said Toyota spokesman Paul Nolasco.
He said company was doing its utmost to beef up quality. "We want to be their favorite car manufacturer."
Toyota, which had thrived on the back of its reputation for quality manufacturing, has suffered a serious image problem since announcing massive recalls in 2009.
The recalls spanned more than 10 million vehicles around the world for faulty floor mats, sticky gas pedals, software glitches and other defects, but mostly in North America.
Toyota was the only major automaker to see its North American vehicle sales drop last year compared to the previous year. Other automakers staged a recovery from the global financial crisis.
Toyota's North American sales last year totaled 1.94 million vehicles, down 2 percent from 2009, with 1.76 million of that total in the U.S.
Toyota fared better in its home Japanese market, where tax breaks and government incentives for green vehicles kept its Prius gas-electric hybrid sales booming.
The Prius ranked as Japan's top-selling car in 2010 with annual sales of 315,669 cars, hitting an all-time high for any nameplate and a 51 percent increase from the previous year.
Toyota's sales in Japan jumped 10 percent last year to 2.20 million vehicles, despite a sluggish economy.
Toyota's overall overseas sales also held up, expanding 7 percent to 6.21 million vehicles. Toyota vehicle sales jumped 19 percent in China and 24 percent in Asia, excluding Japan, according to Toyota.
Analysts say making solid profits is more important the sales numbers game. But they also say boosting profits is impossible without sales growth in the auto industry.
Before the financial crisis and the recall fiasco, Toyota appeared unstoppable and on track to sell perhaps as many as 10 million vehicles around the world a year.
Toyota has not emphasized a growth strategy as much since the recall mess. It no longer has the annual president's news conference, where global sales targets were announced with fanfare.
During the recall crisis, Toyota was criticized as being slow in responding, but its image has largely held up outside the US.
In December, Toyota agreed to pay USD 32.4 million in fines to the US government to settle the investigation into its handling of two recalls. The latest settlement was on top of the USD 16.4 million fine Toyota paid earlier.