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May 8, 2008
Reflecting the dismal state of the current auto market, Toyota is projecting its sales will be down 27 percent this year, according to the Associated Press.
That’s very sobering news for the auto industry.
As Detroit’s Big Three have struggled for years to retain market share, the Asian manufacturers – including Toyota, Honda, Nissan, Hyundai, Subaru – have been growing in reputation and sales.
Apart from being lumbered with millions and millions of dollars in healthcare and pension liabilities, the Big Three seemed incapable of coming up with designs that either excited or provided assurance of reliability.
Toyota and Honda in particular have been brilliant in building a franchise that now rests on very solid reputations for reliability which is, not surprisingly, what the vast majority of people want.
Now Toyota, which has been recently tussling with General Motors over who is the king of the castle in terms of sales, is predicting a serious downturn in sales and sees overall U.S. auto sales at about 14.7 million vehicles this year.
That’s way down from recent years and the company cited the faltering U.S. economy, high energy costs, a flat domestic market and the weak dollar for its woes.
Toyota’s announcement is very sobering given that it seems ideally placed with its fuel efficient Corolla and Prius hybrid in a world of soaring gas prices.
Certainly the company put on a brave face.
"We are facing a severe business environment," President Katsuaki Watanabe was quoted as saying. "Toyota considers this headwind as a valuable opportunity to turn it into a more flexible and stronger company."
Given that this is a superbly well run company, it is likely to emerge stronger and better positioned for the brave new world we are entering as developing economies start to roll – including the mega-ones in China and India – oil prices soar, misguided adventures such as George Bush’s War in Iraq keep Mideast politics raw and the global environment changes before our eyes.
But for the short term, the news is just more evidence of the big downturn in the U.S./world economy and right now there is no light at the end of the tunnel.
- Peter C.T. Elsworth
Posted by Peter C. T. Elsworth 
at 11:07 AM to Toyota
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