Sales-wise? Sure, it competes. I'd argue it's even potentially MORE successful given how well it sells and how efficiently and quickly the games are developed. GT5 was a ridiculous waste of 6 years, not that the final product wasn't great.
As far as the games themselves, professional racing sim analysts have broken it down and it's clear that Forza doesn't really drive like a sim. It helps you out in a lot of ways automatically which the real cars would not, and thus is more fun for people who want something more arcady, while GT5 has those options all assists can be turned off and it becomes a real sim, with the most accurate physics in the genre. My one big complaint with GT5 (and it's pretty big) is I perfer to play in a realistic cockpit view, and it only has that view for 200 cars (most of which I don't care about).
