Toyota

(TM) - Get Report

raised its earnings guidance for the first half of 2006, and the Japan-based automaker said it now expects to increase global sales by more than 10% in 2008, putting it on track to overcome

General Motors

(GM) - Get Report

as the world's largest automaker.

Toyota said its parent's net income for the half-year period to Sept. 30 would jump 31.6% from its previous forecast of 500 billion yen. The company logged a profit of 283.6 billion yen in the same period last year.

Meanwhile, the automaker announced a new ambitious sales plan targeting global sales of 9.8 million vehicles in 2008. If it attains that goal, the company's sales levels would presumably be higher than GM's on a sales basis.

The U.S. icon, which has long been the world's largest automaker, recorded sales of 9.2 million vehicles in 2005, while Toyota notched sales of 8.13 million.

Toyota's ascent wouldn't be surprising. With its lower cost structure and compact, fuel-efficient vehicles, the company has been gaining market share on U.S. rivals for years in the all-important North American auto market.

Ford

(F) - Get Report

and GM have been mired in restructuring efforts, as both companies have wrestled with legacy and health care costs that have spiraled out of control. Meanwhile, their most popular products, pickup trucks and SUVs, have lost some luster as U.S. consumers have grown more sensitive to high gasoline prices. Both have scaled back production.

Shares of Toyota were recently up 84 cents, or 0.8%, to $107.20.