Toyota Motor Corp. spokesman Hideaki Homma said the company sold 4,817,941 vehicles globally during the first six months of the year.
GM said it sold 4,540,409 vehicles, a decline of 3 percent from the first half of 2007.
The Detroit automaker blamed the decline on economic pressures and labor disruptions in the U.S. market. But GM said it posted record-breaking sales in other regions, including Latin America, Asia and Europe.
Automakers have been struggling lately to maintain sales momentum amid soaring motor fuel prices. Toyota has a reputation for high-mileage cars such as its hit gasoline-electric Prius hybrid, but it is still facing the challenge of sluggish auto markets in the U.S., Europe and Japan.
Expectations have been high that the pace of Toyota's recent global booming sales growth will diminish despite stronger sales in emerging markets, such as India.
Toyota has said it expects to sell 9.85 million vehicles worldwide this year, up 5 percent from last year. But it may lower that target when it updates its strategy next month.
Toyota has been aggressively switching models to boost production of smaller, fuel-efficient vehicles instead of trucks and sport utility vehicles to meet changing consumer tastes.
Earlier this month, it announced sprawling manufacturing changes in the U.S., including starting production of the Prius for the first time, and shutting down truck and SUV production.
Toyota said it plans to produce the Prius — now made only in Japan and China — in Mississippi by 2010, and will consolidate truck production in San Antonio.
General Motors is also reshaping its U.S. production, closing plants and reducing pickup and SUV production.
Last month, all major automakers except for Honda Motor Co. reported steep sales declines in the U.S. for the worst June for the industry in 17 years.
Toyota officials say they are looking for growth outside the U.S. and Japan.
Last week, it said it is acquiring land in Brazil for a plant to likely start making compact vehicles as early as 2011. The plant, Toyota's second in Brazil, will create about 2,500 jobs and have initial annual production capacity of 150,000 vehicles, according to Toyota.
The switch to smaller vehicles is almost certain to bite into the profits at automakers because profit margins are heftier for bigger models.
General Motors has been losing billions over the last three years, while Toyota has been chalking up booming profit.
GM shares gained $1, or 7 percent, to $15.32 in morning trading. Toyota's U.S. shares fell $1.19, or 1.3 percent, to $91.68.
