Toyota: Mortal afterall?
07-02-09, 07:14 AM
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Toyota: Mortal afterall?
Toyota's down, but not out
Could Toyota Motor Corp. be mortal after all?
For the third month in a row, Ford Motor Co. outsold the Japanese juggernaut in the United States, still a crucial and rich market amid this nagging recession. In June alone, the Dearborn automaker reported an 11 percent year-over-year decline in monthly sales to 148,153 cars and trucks, compared to Toyota's 34.6 percent slide to 131,654 vehicles.
And this: General Motors Corp. -- beleaguered and bankrupt, its dealer body jittery and brand image suspect, its only willing lender the Treasury -- so far this year has outsold Toyota 947,518 to 770,449, according to Autodata Corp. Partly evidence of Toyota's strong presence in, and dependence on, the imploding California market?
Yes, but what else?
For the first three months of the year, Toyota lost more money than Ford and even GM. Since then, the Japanese automaker has replaced its president with a scion of the founding family, 53-year-old Akio Toyoda, who promises a "back to basics" push for the industry's richest automaker even as more troubles emerged in the first weeks of his new assignment.
GM, a longtime partner with Toyota in the New United Motor Manufacturing joint venture, this week confirmed that it would use its Blitzkrieg Chapter 11 bankruptcy to declare the decades-old California tie-up with Toyota a bad asset and leave it to be unwound in bankruptcy court.
The move presents Toyota with a dilemma: Shutter the plant in the Bay Area city of Fremont, which would violate its no-plant-closing pledge and inflame relations with powerful Washington Democrats, including Speaker Nancy Pelosi, D-San Francisco. Or continue to lose money running an underutilized assembly plant, the only auto assembly plant still operating in anti-industrial California.
Should be a comparatively easy call, considering Toyota's assembly options elsewhere in the United States and Canada. Those would include, by the way, the gleaming new plant it opened in San Antonio at just the wrong time to build the full-size pickups ("that nobody wants," a snarky comment of dubious validity). And there's the half-finished plant in Mississippi that was supposed to be the first U.S. source for its game-changing Prius hybrid.
News flash: Detroit's automakers are not the only "arrogant" players in the global auto game to place big product-and-plant bets at the wrong time, even if they clearly have a lot less financial capacity to absorb their bad calls. Nor are GM, Ford and Chrysler Group LLC the only ones to get themselves cross-ways, in theory, with politicians busy reshaping the American economy to their image.
This is ObamaNation in the Great Recession, where many routine business decisions have acute political implications. The stunning collapse of U.S. auto sales and the slow climb back is remaking the auto industry, even pressuring the most rich and powerful to change.
In Toyota's case, that means battling the "big company" disease foreseen by retired CEO Fujio Cho and contending with leaner American rivals, two of them backed by the federal government.
Rich Toyota (very rich, with roughly $33 billion in cash on hand) will be forced to consider the political ramifications -- particularly among the powerful California delegation -- of its decisions and Washington's tactics to "save" Detroit and the United Auto Workers.
None of which is to suggest that Toyota is going anywhere because it's not. It's rich. It's smart. It's proven itself to be far more adept than its Detroit rivals at delivering solid products with mass appeal, working the corridors of power in today's Washington and making strategic manufacturing investments in non-auto states to turn them into Toyota states.
And the fact that it's the acknowledged leader in the politically required greening of the U.S. auto industry probably trumps the fact that it runs no union shops in its assembly and parts plants in the United States -- with the exception of the NUMMI plant in Fremont.
When this recession ends, if slowly, a likely three-way battle will be under way for automotive leadership in the rich U.S. market. Not yet sure if GM will emerge from bankruptcy as planned and be one of the three. But Ford will be there, and so will Toyota -- guaranteed.
http://www.detnews.com/article/20090...not-out/?imw=Y
Could Toyota Motor Corp. be mortal after all?
For the third month in a row, Ford Motor Co. outsold the Japanese juggernaut in the United States, still a crucial and rich market amid this nagging recession. In June alone, the Dearborn automaker reported an 11 percent year-over-year decline in monthly sales to 148,153 cars and trucks, compared to Toyota's 34.6 percent slide to 131,654 vehicles.
And this: General Motors Corp. -- beleaguered and bankrupt, its dealer body jittery and brand image suspect, its only willing lender the Treasury -- so far this year has outsold Toyota 947,518 to 770,449, according to Autodata Corp. Partly evidence of Toyota's strong presence in, and dependence on, the imploding California market?
Yes, but what else?
For the first three months of the year, Toyota lost more money than Ford and even GM. Since then, the Japanese automaker has replaced its president with a scion of the founding family, 53-year-old Akio Toyoda, who promises a "back to basics" push for the industry's richest automaker even as more troubles emerged in the first weeks of his new assignment.
GM, a longtime partner with Toyota in the New United Motor Manufacturing joint venture, this week confirmed that it would use its Blitzkrieg Chapter 11 bankruptcy to declare the decades-old California tie-up with Toyota a bad asset and leave it to be unwound in bankruptcy court.
The move presents Toyota with a dilemma: Shutter the plant in the Bay Area city of Fremont, which would violate its no-plant-closing pledge and inflame relations with powerful Washington Democrats, including Speaker Nancy Pelosi, D-San Francisco. Or continue to lose money running an underutilized assembly plant, the only auto assembly plant still operating in anti-industrial California.
Should be a comparatively easy call, considering Toyota's assembly options elsewhere in the United States and Canada. Those would include, by the way, the gleaming new plant it opened in San Antonio at just the wrong time to build the full-size pickups ("that nobody wants," a snarky comment of dubious validity). And there's the half-finished plant in Mississippi that was supposed to be the first U.S. source for its game-changing Prius hybrid.
News flash: Detroit's automakers are not the only "arrogant" players in the global auto game to place big product-and-plant bets at the wrong time, even if they clearly have a lot less financial capacity to absorb their bad calls. Nor are GM, Ford and Chrysler Group LLC the only ones to get themselves cross-ways, in theory, with politicians busy reshaping the American economy to their image.
This is ObamaNation in the Great Recession, where many routine business decisions have acute political implications. The stunning collapse of U.S. auto sales and the slow climb back is remaking the auto industry, even pressuring the most rich and powerful to change.
In Toyota's case, that means battling the "big company" disease foreseen by retired CEO Fujio Cho and contending with leaner American rivals, two of them backed by the federal government.
Rich Toyota (very rich, with roughly $33 billion in cash on hand) will be forced to consider the political ramifications -- particularly among the powerful California delegation -- of its decisions and Washington's tactics to "save" Detroit and the United Auto Workers.
None of which is to suggest that Toyota is going anywhere because it's not. It's rich. It's smart. It's proven itself to be far more adept than its Detroit rivals at delivering solid products with mass appeal, working the corridors of power in today's Washington and making strategic manufacturing investments in non-auto states to turn them into Toyota states.
And the fact that it's the acknowledged leader in the politically required greening of the U.S. auto industry probably trumps the fact that it runs no union shops in its assembly and parts plants in the United States -- with the exception of the NUMMI plant in Fremont.
When this recession ends, if slowly, a likely three-way battle will be under way for automotive leadership in the rich U.S. market. Not yet sure if GM will emerge from bankruptcy as planned and be one of the three. But Ford will be there, and so will Toyota -- guaranteed.
http://www.detnews.com/article/20090...not-out/?imw=Y
07-02-09, 07:28 AM
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I've no doubt. I also think Ford has a golden opportunity here to emerge as one of the strongest car companies in the world, if they play their cards right.
07-02-09, 08:01 AM
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I'm really happy for Ford and I hope they continue to beat the crap out of Government Motors and that other company I could give 3 craps about called Chrysler.
As for Toyota the new CEO made it clear he has seen Toyota chase being bigger and not making the best car. They are at 70% production capacity. Toyota did put a lot of attention back into quality the last couple years which took money away from other things.
Toyota is down like others but still by far in the drivers seat. I think what they are seeing is Lexus TRUE value as in bad times, this brand is still doing well and is bringing home tons of profits. I expect Lexus to continue to seperate more and get more models from cheaper ones to more expensive ones.
As for Toyota the new CEO made it clear he has seen Toyota chase being bigger and not making the best car. They are at 70% production capacity. Toyota did put a lot of attention back into quality the last couple years which took money away from other things.
Toyota is down like others but still by far in the drivers seat. I think what they are seeing is Lexus TRUE value as in bad times, this brand is still doing well and is bringing home tons of profits. I expect Lexus to continue to seperate more and get more models from cheaper ones to more expensive ones.
07-02-09, 08:30 AM
#5
There are a few things to consider here:
1) Toyota is relatively sparse on new models this year
2) Toyota has not been doing NEARLY as much advertising as GM and Ford have.
3) Toyota has not been giving nearly the amount of incentives that the domestics have
The only new models I can think of are the Venza, RX, and ISc (which just came out last month). Ford is touting the redesigned Fusion, Taurus, F150, Mustang, Lincoln has the MKS and MKZ, and Mercury...oh yeah...Mercury.
GM has the Camaro (huge), the Traverse, Equinox, updated versions of the Corvette, CTS wagon and CTS-V.
Ford has been advertising the pants off the Fusion from what I have seen. I would venture to say that nearly every other commercial break I see on TV has an ad for the Fusion on it...they are HEAVY, HEAVY, HEAVY on that. GM is almost as aggressive with advertising the Silverado and Malibu and telling consumers that this is the time to "buy American". Toyota? I have seen one or two commercials for the Corolla, one or two for the ISc, and that is it.
There was a thread from yesterday about incentives but I don't have the time to dig it up right now. I recall that the Japanese manufacturers were roughly half, if not less, of what the domestics were spending in incentives. As we saw once before, that is a very dangerous game to play because once Ford and GM decide to reign in on incentives they have a hard time selling their cars because people are so used to them being readily available. For now it will help them move cars...for later...who knows?
1) Toyota is relatively sparse on new models this year
2) Toyota has not been doing NEARLY as much advertising as GM and Ford have.
3) Toyota has not been giving nearly the amount of incentives that the domestics have
The only new models I can think of are the Venza, RX, and ISc (which just came out last month). Ford is touting the redesigned Fusion, Taurus, F150, Mustang, Lincoln has the MKS and MKZ, and Mercury...oh yeah...Mercury.
GM has the Camaro (huge), the Traverse, Equinox, updated versions of the Corvette, CTS wagon and CTS-V.
Ford has been advertising the pants off the Fusion from what I have seen. I would venture to say that nearly every other commercial break I see on TV has an ad for the Fusion on it...they are HEAVY, HEAVY, HEAVY on that. GM is almost as aggressive with advertising the Silverado and Malibu and telling consumers that this is the time to "buy American". Toyota? I have seen one or two commercials for the Corolla, one or two for the ISc, and that is it.
There was a thread from yesterday about incentives but I don't have the time to dig it up right now. I recall that the Japanese manufacturers were roughly half, if not less, of what the domestics were spending in incentives. As we saw once before, that is a very dangerous game to play because once Ford and GM decide to reign in on incentives they have a hard time selling their cars because people are so used to them being readily available. For now it will help them move cars...for later...who knows?
07-02-09, 09:16 AM
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ford's made a lot of good product AND marketing (key) moves, and one of the marketing moves i'm betting paid off well is sponsoring american idol, giving away vehicles, making a video every week, etc. it's HUGE promotion, it's a great audience.
toyota still sells tons of vehicles, but it has some significant problems. vast truck capacity and a product that doesn't sell very well. pressure from both below (kia, hyundai) and above/besides (ford, gm, honda). the hybrids are a hit but i doubt the profits are that great given the parts and complexity and STILL price pressure because there's only so much more people will pay for better fuel economy or be 'green'.
but the only tv ads i see for toyota are CHEESY DEALER ones with guys or cute women yelling with fake smiles. what does this sound like? GENERAL MOTORS.
i've said it before that toyota runs the risk of becoming the new GM. doesn't have to turn out that way, but they need to take a HARD look in the mirror.
companies generally make the most mistakes when they THINK they're at their peak.
they can definitely turn it around but it's going to involve some painful decisions.
toyota still sells tons of vehicles, but it has some significant problems. vast truck capacity and a product that doesn't sell very well. pressure from both below (kia, hyundai) and above/besides (ford, gm, honda). the hybrids are a hit but i doubt the profits are that great given the parts and complexity and STILL price pressure because there's only so much more people will pay for better fuel economy or be 'green'.
but the only tv ads i see for toyota are CHEESY DEALER ones with guys or cute women yelling with fake smiles. what does this sound like? GENERAL MOTORS.
i've said it before that toyota runs the risk of becoming the new GM. doesn't have to turn out that way, but they need to take a HARD look in the mirror.
companies generally make the most mistakes when they THINK they're at their peak.
they can definitely turn it around but it's going to involve some painful decisions.
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