Toyota expects to produce a record 9.42 million vehicles in 2007 - a four per cent rise that should see it over-take General Motors and become the world's biggest auto maker.

As the Japanese firm woos buyers worldwide with cars seen as safe, affordable and fuel efficient, US rivals GM and Ford are fighting falling market share, closing factories and shedding thousands of jobs.

Soaring fuel prices have battered Detroit's auto heartland, with customers shunning gas-guzzling pickups in favour of cheaper-to-run models from Japanese and South Korean car makers.

Asked about the possibility of passing GM in 2007 - Toyota's 70th anniversary - company president Katsuaki Watanabe said: "That would merely be a result, not a goal.

"The important thing is to be a leader in car-making, and that's done by improving products."

Vehicle quality would be Toyota's top priority at a time of rising vehicle recalls.

Through hit products like the Camry, Yaris and Prius hybrid cars, Toyota has overtaken Chrysler Group in the United States and is expected to pass Ford next year, market fore-caster Edmunds.com says.

Toyota, which builds European versions of the Corolla and Avensis at Burnaston, near Derby, overtook Ford to take second spot in the US monthly sales charts twice in 2006.

Ford has said it expects its US market share to slip to around 14 or 15 per cent in 2007, from 16.6 per cent in the first 11 months of this year. Toyota had 15.3 per cent in the same period.

The Toyota group, which includes minivehicle maker Daihatsu and truck-maker Hino, forecasts 2007 global group sales of 9.34 million vehicles, up from an estimated 8.8 million this year.

GM does not provide sales or production forecasts on an annual basis, but adding its January-September global sales to its fourth-quarter production plans puts its 2006 volume at 9.168 million vehicles.

At the parent level alone - meaning the Toyota, Lexus and Scion brands - Toyota expects to boost 2007 output by four per cent to 8.47 million cars, with new capacity in Russia, China and the United States, among others, and sales up by six per cent to 8.4 million units.

"Toyota is securing a solid earnings base as its production methods are deployed worldwide and global demand shifts to fuel-efficient vehicles," Goldman Sachs analyst Kunihiko Shiohara wrote in a recent report.

"Its annual vehicle production is likely to increase about 500,000 a year for the next few years and we expect operating profit growth of about ten per cent for the next three years."

In the year to March, Toyota expects to earn a net profit of #6.7 billion, a record for any Japanese company.

Toyota shares have gained 27 per cent this year, valuing the firm at close to #117.3 billion, about 14 times GM's market capitalisation.

To keep profits growing in tandem with sales, Toyota is continually looking to cut costs, such as merging more car components. What it saves in costs, it hopes, will give it more to spend on developing new cutting-edge technologies.

Through aggressive marketing and better product, Toyota aims to boost sales of its premium Lexus cars to balance out margins with increasingly popular compact cars.

Elsewhere, Toyota recently formed an equity tie-up with truck-maker Isuzu in a bid to catch up in clean diesels, a rival technology to its signature hybrid system. Last year it took a stake in Fuji Heavy Industries, partly as a way to quickly add production capacity in North America.

One gap Toyota has yet to fill is the development of ultra-cheap cars, such as Renault's no-frills 5,000-euro (#3,356) Logan, to compete in emerging markets such as India.

Mr Watanabe repeated that was a top priority to ensure future growth, especially as mature markets in North America, Europe and Japan see stuttering demand. He said his engineers were making progress.

"This is something all auto makers need to think about, not just Toyota," said UBS Securities analyst Tatsuo Yoshida. "Toyota is basically powerless in India now. If they build a car like the Logan, it would be frightening for the rest."

Executives are aware that becoming global leader brings its own headaches.

"At the top, the scrutiny and criticisms are on a different level," one said. "That's something we need to be mindful of, and figure out how to deal with."