Toyota ended 2010 as the world's largest carmaker despite suffering a series of recalls and safety issues.
The Japanese company's sales reached 8.42 million vehicles, just beating General Motors' tally of 8.39 million.
Toyota's sales, including truckmaker Hino and carmaker Daihatsu, rose 8% from 2009 due to strong growth in China and other Asian countries.
Toyota dethroned its US rival as the world's biggest carmaker in 2008 - a position GM held for nearly 80 years.
But the company says it is targeting profits and quality rather than volume.
"Being number one in term of sales is not important for us," said Toyota spokesman Paul Nolasco.
"Our objective is to become number one with the customer, in terms of service and customer satisfaction."
The Japanese company, which had an impeccable reputation for quality, saw its image suffer in 2009, especially in America where it was the only major carmaker to see sales fall in 2010.
It recalled more than 10 million vehicles around the world for issues ranging from faulty floor mats to computer software faults.
Toyota's North American sales last year totalled 1.94 million vehicles, down 2% from 2009.
The company's sales in Japan rose 10% to 2.20 million vehicles, with the Prius its best-selling model.
Meanwhile, GM, which underwent a major restructuring in 2010 after going into bankruptcy protection and being bailed out by the US government, saw sales rise 12.2%, with a 28.8% jump in China. Sales in America rose 6.3%.
Consequently, for the first time the company sold more vehicles in China than in the US.
Although sales rose in the UK, there were setbacks in some other European markets, with Germany falling 29.5% and Italy down 10%.