Japan's Toyota Motors has revved ahead of U.S.-based General Motors in 2012 to reclaim the title of world's biggest auto manufacturer.

This week, Toyota announced global sales of 9.75 million vehicles, even beating its own forecast of 9.7 million. GM earlier this month had announced global sales of 9.29 million vehicles for 2012 -- about 460,000 fewer vehicles.

The gap is "fairly sizeable...about 5% or so," says Chris Richter, CLSA Senior Analyst, Japanese Autos in Tokyo. However he sees Japan's return to the top in 2012 as simply "going back to the natural order of things" after Asia's second largest economy was devastated by the 2011 quake and tsunami.

"It's not that General Motors did anything right. They got a free pass in 2011 because the other team (Toyota) wasn't on the field. What we saw in 2012 was a more normal situation in terms of pecking order of global sales."

"In 2011, Japan had too many negative events which led to a shortage of (vehicle) supply," agrees J.P. Morgan's Kohei Takahashi, a Tokyo-based auto analyst. "If there were no such kind of events, Toyota should (have been) number one (that year)."

With Toyota's return to the top, the question remains "how does it manage to succeed" just as its tech cousins in Japan have become infamous for hemorrhaging billions of dollars in losses. Panasonic in 2012 reported a record loss of $9.68 billion, while Sony reported a record $5.7 billion loss in last year's fiscal year through March. Meanwhile, Sharp Corp owes $31 billion to the banks.

While a perceived lack of creativity and innovation plagues Japan's tech industry -- as well as a yen hitting post-WWII highs last year -- "it has a lot to do with a difference in the nature of the auto and tech industries" and a traditionally stronger emphasis on reliability and quality in the former, says CLSA's Richter.

With tech products "consumers are very price motivated. They expect a television to work for several years but when they want to change it they'll chuck it in the bin. But if you buy a new car, you expect it'll work every day you own it and when you resell it you want it to hold its value," he adds.

For Japanese automakers, "perfection and quality of the product matter a lot."

Toyota and GM

In the United States, the world's second largest auto market after China, General Motors is the country's top-selling brand, while Toyota is number three, after Ford Motor.

But domestically in Japan, Toyota is number one as U.S. automakers have little penetration in the country.

That likely will not change, says CLSA's Richter.

"American automakers wouldn't invest in Japan because it's already very crowded and very competitive."

With profit margins in the "low single digits," Richter adds that Japanese automakers don't make much money in Japan as it is. "Ford wouldn't go in" and any idea that Japan makes it difficult for American automakers to enter the Japanese market is just a "political smokescreen to attract government help from Washington."

Richter says the U.S. auto market provides for profit margins in the "high-single" or "low-double digit" range.

Toyota and Volkswagen

While Toyota and GM claimed the top two spots in 2012 global market sales, Volkswagen Group sold 9.09 million vehicles to pull in at number three. Last year was the first time Western Europe's most dominant automaker broke the nine-million vehicle barrier.

Volkswagen passed that milestone not because of stellar sales in Europe but because of BRIC countries, including Brazil and China, where it enjoys growing market share, says Richter.

Europe is a place where "global automakers go to lose money" because "current economic conditions are bad," he says. Just earlier this month, the International Monetary Fund (IMF) cut its forecast for the eurozone, predicting the region's economic activity would contract for a second consecutive year.