Toyota Head: Toyota is on the brink of "capitulation to irrelevance or death”.

[Perian]

Source: Special Automotive News Email Alert

Hans Greimel - October 2, 2009

TOKYO -- Toyota Motor Corp. President Akio Toyoda said his money-losing automaker is “grasping for salvation” as it struggles to return to profit.

The world's largest car company was once targeting annual sales of 10 million vehicles but now expects sales of 7.3 million this year, down from 8.97 million in 2008, Toyoda said at a news conference here today.

Toyoda, grandson of the automaker's founder, said Toyota is on the brink of “capitulation to irrelevance or death” as he prepares for a second-straight year of substantial financial and unit-sale decreases.

Citing the five stages of corporate decline outlined by Jim Collins, author of How the Mighty Fall, the Toyota chief warned that his company has slumped to stage four.

“We are grasping for salvation,” Toyoda said, adding that the company has already spiraled through the first three stages: Hubris born of success, undisciplined pursuit of more and denial of risk and peril.

“Toyota has become too big and distant from its customers,” the chief executive said.

In the United States, Toyota's sales fell 13 percent in September from a year earlier as the market suffered a sharp letdown after the government-funded cash-for-clunkers program ran out. Total U.S. sales tumbled 23 percent. Toyota is down 28 percent for the year.

Separately, Toyoda called the current dollar-yen rate "very tough," saying the weak U.S. currency made it difficult to return to profit on an unconsolidated level.

"When you get to this level, it makes it difficult to return to profit on sales growth alone," he said.

Toyoda repeated Toyota's aim to return to profit at the parent level "as soon as possible," even as it expects global sales to fall 18 percent from 2008 to 7.34 million vehicles this year. That would leave about 30 percent of its production capacity unused.

Toyoda took the helm in June as the world's biggest automaker faced one of its biggest crises in history amid a global credit crunch and an industrywide sales slump that forced two U.S. automakers into bankruptcy.

For the financial year to March, Toyota has projected a consolidated operating loss of 750 billion yen ($8.4 billion), assuming a dollar rate of 92 yen. It has forecast a parent-only operating loss of 600 billion yen.

Presenting a further challenge, Toyota said this week it would recall 3.8 million Toyota and Lexus models in the United States -- its largest-ever recall -- because of a risk that a loose floor mat could force down the accelerator. The problem is suspected of causing at least one crash that killed four people.

“We would like to pay our deepest condolences for the loss of four precious lives,” Toyoda said. But because an investigation into the problem is still underway, he said he could offer no further details about plans to address the issue.

“Customers who chose Toyota and Lexus cars because those brands are safe and secure are now beset with anxiety. I regret and apologize for this development,” said Toyoda, who took office in June and is the grandson of the company's founder.

[Perian]

Memo to those of you who constantly disseminate General Motors.

Today's topic is "Toyota".

[FenwickHockey65]

How the mighty have fallen indeed.

And good riddance.

[bmwboy2007]

At some point naysayers will have to admit that it's not the business model of GM that failed, it's the economy that has failed.

[Quest]

Originally Posted by Perian

Memo to those of you who constantly disseminate General Motors.

Today's topic is "Toyota".

Toyota doesn’t make cars they make reliable, previously noted for anyway, transportation appliances. Now with a new Supra… In order to make a firmer handling Camry, the SE, they have to buttress the rear bulkhead, this is why you can’t get fold-down rear seats in the SE and Hybrid. What does that say about the rigidity of the platform?

The only Toyota’s worth a damn are from its Lexus division: The IS350, GS and if it is as good as preliminary reports the LF-A. The LS is too large for my tastes, it's for those that like to chauffeur themselves around.

There happy

[dindak]

One can only hope that Toyota is the new - old GM.

[Smellhound]

Originally Posted by bmwboy2007

At some point naysayers will have to admit that it's not the business model of GM that failed, it's the economy that has failed.

Has the economy failed? Yes, probably yes. But, Toyota's problems may be very similar to what this article states. When times are good (the economy is good) it is very easy to, and sometimes companies are encouraged to, Grow to the largest possible size because it is the easiest way to make tons of money. You build a reputation, then once you have that quality reputation, you don't have to worry about spending time or money to support it anymore...just save that money and pump out product and bring in the dollars.

Maybe what Toyota needs is to give up a little market share, focus on quality cars (and more quality designs) and stop trying to worry about making a car that is 'good for everyone' but 'great for no-one'. Build cars that your customers want, and stop trying to just gain additional customers at all costs. You CAN'T make one car that will please 80% of car buyers. When you try to do that (and it appears that Toyota has with the latest Camry and Corolla), what you end up getting is bland, boring car that really excites no-one at all.

[r22wink]

Originally Posted by bmwboy2007

At some point naysayers will have to admit that it's not the business model of GM that failed, it's the economy that has failed.

GM has made its fair share of mistakes over the years. But you are correct, the current state of the economy magnified those mistakes ten fold.

Good ridence Toyota. Better yet, good ridence all you Yota fans who think your company poops golden terds!

May the best car win.

[GM-Joe]

I think GM's management got a little slow and didn't recognize risks as they came about, but at the same time, how can one compete when every major model you launch the UAW cries and shuts down production. In my opinion, the best thing happened to GM that could have happened. As for Toyoda, they are seeing an uglier picture than GM because if American consumers decided to resist them, they don't have anywhere to go. They don't engineer or in the U.S. and still find the need to import half their autos here, so they wouldn't be getting any bailout from the U.S. government. So Toyoda seems like a smart fellow and I will say that he is very intuitive to see the end of the road is near if they don't react very quickly.

[boston boy]

I'm happy to hear this news, now toyoDa needs to die & die again to make sure they won't come back like jason

DIE TOYOTA DIE

[miken123]

Toyoda pretends to weep about the situation and you guys buy it?

Yes - he's a sharp guy.
No - his company is not QUITE "at the brink." We all know what that _really_ looks like!

[Sal Collaziano]

Be careful for what you wish for. Without Toyota, GM would still be making crappy cars. Competition is good...

[A Bum In A Bus]

Originally Posted by miken123

Toyoda pretends to weep about the situation and you guys buy it?

Yes - he's a sharp guy.
No - his company is not QUITE "at the brink." We all know what that _really_ looks like!

They may not be "on" the brink, but they are close enough they can see over the edge and feel the updraft.

Whatever happened to Mitch-a-bitch-ee.

[zmanjr]

i love toyota, i had a 78 celica gt and a 84 celica gt-s. loved them when they were rear wheel drive. I think toyota has great cars just like gm has a great aura. However their will always be people like my mother who will never buy another american car period. She owns a Subu Outback AWD. She says her dads Subu Forester is less expensive to maintain then my Dads previous Explorer (he had two and gave the last to my younger brother). Her Outback is build in Indiana by Americans but she feels they are also better designed as well. I also pointed out that the Forester is a unit body with out an actual 4wd system like on the explorer which makes maintenance higher that and the explorer is a body on frame as well. You wont change her mind or others like her. My dad on the other hand only buys american cars and only ones that are executive demos types if you are that are like 3 years old or so. He says then you dont take as much a hit on the resale value. Right after you drive it off the lot the 1st time you can lose as much as 30% resale value.

[Novak454]

Originally Posted by bmwboy2007

At some point naysayers will have to admit that it's not the business model of GM that failed, it's the economy that has failed.

And has reached every corner of the world. I'm a critic of GM only because I KNOW they can do better. I have hope, but glad to see some serious, serious hits to Toyota's armor.