Investors aren't urged to buy shares of


(TM) - Get Report

despite the automaker's ascendency to top vehicle manufacturer in the world because of an industry-wide sales slump it can't escape.

Toyota's unit sales skidded 4% to 8.97 million vehicles last year, and those at

General Motors

(GM) - Get Report

tumbled 11% to 8.35 million, enabling the Japanese company to leapfrog


as the world's largest carmaker.

But profit at the new king of the hill hasn't been immune to the worldwide recession, which has proved brutal to all carmakers. The consensus among analysts is that the slump will erase more than 90% of Toyota's fiscal 2008 earnings per share of $10.79 when it releases its report for the current fiscal year ending March 31. There's talk in auto circles about the possibility of an operating loss for the period.

Per-share earnings will crumble another 54% to 49 cents a share next year, according to consensus earnings estimates. Ratings analysis of Toyota results in a grade of "C" and a "hold" recommendation for the stock. Additional data is summarized in the following table:

In addition to news that Toyota has made it to the summit, the firm is elevating the U.S.-educated Akio Toyoda, grandson of the company's founder, as president. The appointment is effective in June, pending approval at a meeting of shareholders.

Like other carmakers, Toyota has been left sitting on outsized inventories as a result of the slump in sales. It recently announced production cuts to whittle down inventories that currently amount to 80 to 90 days of output.

Investors interested in Toyota ought to follow news of the firm's new president. He is reported to be critical of the current management, arguing that in its pursuit of GM, the Japanese company lost its focus on customer service. Speculation is rife that additional changes are in store at the upper echelons of the firm's management.

Richard Widows is a senior financial analyst for Ratings. Prior to joining, Widows was senior product manager for quantitative analytics at Thomson Financial. After receiving an M.B.A. from Santa Clara University in California, his career included development of investment information systems at data firms, including the Lipper division of Reuters. His international experience includes assignments in the U.K. and East Asia.