Toyota Aims for Global Domination by 2010

[Ming]

Toyota aims for global domination
Barron's: No. 2 automaker eyes displacing GM by 2010



By Michael Paige, CBS.MarketWatch.com
Last Update: 2:50 PM ET Sept. 11, 2004

LOS ANGELES (CBS.MW) -- Toyota has its sights set on dominating the worldwide auto market, aiming to by match or better No. 1 General Motors' 15 percent share of the global market by 2010, according to the cover story in this week's Barron's.

The Japanese automaker, which last year overtook Ford Motor as the second-largest producer of light vehicles, currently has a 10 percent share of the market. To reach its goal, Toyota would need to increase its sales by 50 percent, Barron's said.

It will make its biggest push in the U.S., Europe and China, according to the report.

So far this year, Toyota's U.S. sales growth is already sharply outpacing rivals.

Through Aug. 31, Toyota's U.S. sales rose 8.8 percent. In contrast, DaimlerChrysler posted a more modest rise of 1.7 percent. Sales at GM declined 1.8 percent through the first eight months, and Ford posted a 4.8 percent sales drop for the period.

Indeed, the No. 2 automaker sold more of its Camrys in the U.S. than all of the Dodge and Jeep vehicles combined sold by DaimlerChrysler. It also sold more high-end Lexus autos than all four of Ford's European luxury brands in total.

According to Barron's, each percentage point of U.S. market share is worth around $1 billion in profits.

In Europe, Toyota's sales were up 15 percent for the first half, pushing its share of that market up to 5.1 percent from 4.7 percent previously. According to the report, four of the six high-volume European automakers posted sales declines for the period.

Efficiency is one of Toyota's advantages, with its network of about 50 plants globally often running near 100 percent capacity, the report said.

The company comes in well ahead of its rivals in terms of profit for each vehicle it sells, according to the report. Toyota also benefits from the wide range of dependable vehicles it makes, it said.

Customer dissatisfaction with Toyota's dealer network, particularly in the U.S. but also in Europe, represents one area of potential weakness.

Toyota's U.S. dealers, which are often perceived as arrogant, rank near the bottom of customer satisfaction surveys for sales and service, Barron's said.

Article Here

[mjd1001]

Interesting to hear about Toyota's US dealership network.....and I thought it was only GM and ford that had dealers that made buying a car a hassle that it should not be.
It's great we live in a capatilistic society and there is the whole "opportunity to make it and strike it rich" thing....but at the same time I wish I had the opportunity to buy directly from the manufacturer. I hate dealing with dealerships that really don't care much about the product, but do care about making a quick buck for themselves and care about making stupid local television commercials where they can act like idiots and put their kids on TV.

[camaro chris]

i really hope toyota dosnt sell more than GM, and even though i hate ford i would be most happy with the big three from america as 1 2 and 3

[mgescuro]

2010 seems like an good projection for Toyota to surpass GM.
But there are a couple of interesting points of contention mentioned in the article that are more than significant hurdles to accomplishing that...

1) Customer satisfaction problems. Building a great car is one thing, but once you start annoying your customer base, that plants the seeds of doubt.

2) 50 plants worldwide running at 100% capacity. Anyone with a basic operations management background or anyone who has taken a cost accounting class will tell you that running plants at or even near 100% capacity is a recipe for disaster.

Toyota is about 2-3 years ahead of GM in terms of implementing a globally network plant operations system. I don't know why Toyota is the ONLY one getting press on this, but GM is the ONLY other vehicle manufacturer that is implementing this solution. Anyone wonder why GM is debating where to shut down the German or Trollhattan plants? Unnecessary plan capacity. To gain efficiencies. This is all part and parcel. If GM can make Cadillacs and Pontiacs on the same line in China and save on costs. Perfect!! Build 9-7X's in the US for distribution worldwide? Fine. GM is moving towards this. Toyota is all but there already. Ford is still debating whether or not to move Volvo production to England or Jaguar production to elsewhere. Ford is stuck in neutral.

It is no doubt that GM needs to hit the ground running with new product. For the most part, they have been very successful. They are fighting a perception issue on most of their cars, and that doesn't get fixed easily. New products will be able to stem the tide.

The key for GM's success is to fight Toyota on its home turf. GM needs to break into the Japanese market and beat Toyota there. If that means stengthening Suzuki, Subaru, and Isuzu, so be it. If that means building cars in China and shipping it to Japan, so be it. Also, GM's got a big head start in China... They should do everything they can NOT to blow the lead.

IF GM can stop the losses... and make key gains in Europe and China, then Toyota won't catch GM.

[AJR]

I think the "Big 3" will look much different in a few years - at least in the United States marketplace. I see GM, Ford, and Toyota being the biggest in the land in a few years. In fact, I think a lot of people think like that anyway. I would imagine Toyota, Ford, and GM are the most common names in most automobile surveys and car searches.

In any case, I say good job to Toyota. It is an example of how to run a truly global and efficient company.

And if Toyota does manage to pass GM globally, I guess I'll just shrug my shoulders and move on.

[88montess]

where the hell are you getting your feeling that Toyata will overtake GM by 2008 Laserwizrad. You must only be getting you info to base that on the biased Media. Toyata car sales are down 20,000 units while Chevy alone has car sales up almost 60,000 units and for the year Chevy alone is beating Toyata in car sales by 20,000 units. Total Toyata sales with all its divisions were 1,385,000 Chevy alone is 1,815,000. The only reason GM sales are down is because they include Saturn and Olds in the mix this year. So far Chevy sales up 20,000 Pont. sales up 33,000. Total GM sales are down 58,000 units And last year at this time we had 85,000 Olds sales.

Thats national globally GM China sale have tripled Holden saales are strong, opel Astra sales are strong GM asia sales are up Gm canada sales are up.

Where do you see a weakness.

[atomicshark]

If GM makes great cars for the next 5 years they will stay on top and build marketshare. I would like GM to build a mainstream sedan that actually looks and performs better than the imports on "ALL LEVELS". I have always felt that I always had to make an excuse for buying a GM car. For example the Impala is a great value with lots of space and decent fuel economy and i think it looks decent, but t5he interior was design and built by Fisher-Price, and that sucks.
The G6 is a step in the right direction, but it is not quite the step above and beyond that GM needs to stay ahead of Toyota.
On that note I feel I would choose the G6 over the Camry because it is American, but not necessarily because it is better than the Camry. The fact that GM made the choice a close call is a victory in itself I suppose.

[Swahili]

With GM's push for higher quality vehicles and new models continuously rolling out, I personally don't think GM will have to worry AS LONG as they continue to put quality and desirable vehicles out on the road.

[Ming]

Originally posted by atomicshark@Sep 11 2004, 06:39 PM
If GM makes great cars for the next 5 years they will stay on top and build marketshare. I would like GM to build a mainstream sedan that actually looks and performs better than the imports on "ALL LEVELS".

How cool would it be to see the Pontiac G6 become the top selling sedan?

[jro4566]

I'm glad Toyota wants this by 2010 because GM now has a heads-up to tell themselves, "Hey, we need to sell more and bring out more, better, intriguing products". Competition only makes GM stronger.

[giagastormer]

Originally posted by RCtennis3811@Sep 12 2004, 12:20 AM
I'm glad Toyota wants this by 2010 because GM now has a heads-up to tell themselves, "Hey, we need to sell more and bring out more, better, intriguing products". Competition only makes GM stronger.

I agree with you 100%.

[usa1]

Originally posted by giagastormer+Sep 11 2004, 07:27 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (giagastormer @ Sep 11 2004, 07:27 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-RCtennis3811@Sep 12 2004, 12:20 AM
I'm glad Toyota wants this by 2010 because GM now has a heads-up to tell themselves, "Hey, we need to sell more and bring out more, better, intriguing products".&nbsp; Competition only makes GM stronger.

I agree with you 100%. [/b][/quote]
I wish I could be as optimistic.

GM going from 50% market share to 27% over the last 20 years hasn't done a heck of alot for their competitive spirits.

Mark

[paul3230]

Yeah, you would think that that kind of marketshare slide would do something, however in GM's defense, I'm glad that Toyota let the world know it wants to be number 1. GM can , and is right now, trying to align everything so that they can stay on top. I think predictions are great, but honestly anything can happen. Just look with the success with the 300c! Who knew? And let's not forget the huge lift GM will get when their GMT800 replacements come into effect.

[AdmiralViscen]

lazerwizard, did you even read the article? Toyota wants to beat GM in WORLD SALES. GLOBALLY, GM has a 15% chunk of the market, while Toyota only has 10%. Doing well in America by 2008 won't give Toyota a 50% increase in global market share.

[LINCSAT]

The other idea that we are not discussing is the fact the big 3 have not really been trying in the car market where honda and toyota flurished. The big 3 are trying now and that will push down camry sales, we are already seeing this with the accord. With the lx series from DCX and the 500 and futura from ford and gm's new small and middle class platforms coming on stream in a big way I believe honda and toyota are going to see there bottom line start to get smaller. The big 3's offshore brands have helped somewhat and there are some stars in the line up but the real push will come with big' 3 new car based platforms. I don't see honda making more of a in road in the u.s with all the new american and offshore american owned cars coming. Look at toyota failure time and time again at the pickup market and honda has no plans for that market at all, the renault/nissan titan is there but it is at the high end of the market, not a real work truck and I would take the F150 anyday over any truck but thats another post. I believe who goes to the top and who stays will be determined in china. The big 3 have really gone nuts in china and it is paying off and they are accepted really well where honda and toyota have not been accepted as well for polical reasons most likely.