Toyota sputters as market shifts; Like Big 3, has too many Trucks, Lacks Small Cars

[osv_alero]

Originally Posted by A Bum In A Bus

I hope and pray everyday that Toyota goes bankrupt, out of business, broke, implodes and goes up in a cloud of rice dust.

We can only pray, hope . . .

[osv_alero]

Originally Posted by paul8488

Exactly. I hate being a Toyota apologist, because I don't like them, but they just have to ramp down truck production and ramp up car production. May not happen in a day, but it's a whole lot easier than redesigning a new car like GM has to do in many cases.

I disagree. As toyota has been introducing new compact cars, their gas mileage ratings have been going down. Check out scion as a perfect example. toyota will need to revamp their product line if they want to be class leading with the mpg area.

Besides the prius, there is no toyota that is class leading in the gas mileage area.

[stormwatcher]

All automakers were blindsided by the rapid change in market conditions, even Toyota. But the fact is Toyota will likely remain profitable during these tough times which gives it far more flexibility in adjusting.

[BrickTamland]

Toyota does not "lack small cars" in the sense that GM lacks small cars. GM does not competitive enough small cars, while Toyota can't build enough Corollas and Yarises. The Corolla and Yaris may not be the most appealing cars in their class and are certainly not the best, but Toyota did something right with those models to have them seel so fervently.

[2002 Caddy]

Originally Posted by Slideways

Thank you. Everyone seems to think that 18 months ago GM knew gas prices were going to double by summer 2008 or that they're stupid for not anticipating it. The thing is, nobody knew, otherwise consumers wouldn't have been blind-sided either.

The truth is that we all knew this day was coming for YEARs not months
even CNN first ran "we were warned" (an editorial warning about an oil crunch) in 2006. Economist have been talking about "peak oil" since late 1999.

We knew it was coming... we just didn't know exactly WHEN...
So when as a CEO you face this uncertainty you have two options:
1) The first goes like this... We are making a ton on trucks. Lets milk it for all it worth for as long as we can. Small cars aren't profitable or easy to sell. forget about them. No one likes small cars. Or
2) Option two Lets balance out product mix so that our butts are covered... Lets build a good small car and get as much out of trucks as we can, keep the company nimble and be ready to change the product mix in a heat beat.

GM Management picked option 1... Toyota Management picked option 2
GM is about 15 Billion away from Chapter 11 (and is loosing about 800 million a month... do the math we are a year and a half from the abyss) and Toyota would have to lose about 100 Billion to be in the same spot and even then they are making money (about 500 million a month).

[GM-Joe]

Originally Posted by AMERICA 123

Its more than possible that the next six months at an ever increasing rate are going to be some of the worst they've ever had here.

And then is Europe..........

Also wouldn't be surprising to see Honda go past them (8 - 24 months) and Hyundai pull in right behind them ( 24 - 48 months ) in NA.

It depends, if they have available capacity for cars, then they will sell them all, otherwise it will be rough. Honda used up all of their supply in May and June and they won't have another big month unless they can increase output which doesn't seem very likely because when you already run near 100%, there isn't much to exceed. Thus, Toyota is screwed if their car plants are maxed out, because it will be a while before they can increase output.

[goblue]

Originally Posted by osv_alero

I disagree. As toyota has been introducing new compact cars, their gas mileage ratings have been going down. Check out scion as a perfect example. toyota will need to revamp their product line if they want to be class leading with the mpg area.

Besides the prius, there is no toyota that is class leading in the gas mileage area.

Yes, but its still far better than what GM is shoveling in the small car arena.

Toyota entered the truck market because it had plenty of money to work with, and predicted a return on investment. Had the cheap gas held out a few more years, they would have made off handsomely and furthered their dominance. They dropped small car gas mileage slightly to augment performance and further attack what American cars historically delivered. Now, they simply revise a few things and its back to class leading mileage. It'll take about one model year.

GM has so far avoided a class leading small car not because they can't engineer it - but because they couldn't afford to. It takes events like this (expensive gas) to break the union and allow small cars to be built profitably.

The most unaffected carmaker is probably Honda. They never entered the market for vehicles that use a lot of gas. However, they probably could have made good money in that segment over the last 10 years. Thats what people forget, maybe thats a reason Honda is still relatively small. They stayed focused on a somewhat narrow range, and just happened to pick the right area to focus - but they have not been as successful as they could have. Some of you will cite BMW as a good example of how staying small and focused is a benefit, except thats assuming they'd succeed at building basic transportation for cheap prices. I bet they'd fail miserably in that arena. Just look at how poorly MB understood it when it tried to handle Chrysler. They just about destroyed it - and might have.

My point, none of this is as simple as the media would have us all believe. Honda smart, GM stupid, Toyota surprised. Excellent soundbites - but counterproductive to actually understanding what has happened.

[Bigbee60]

Contrary to many of the posts above, Toyota can't just stuff more 1.8L engines in the Scion xB's and drop the 2.4L gas hog engine in those models or move it to the Camry to replace the V-6 there. They have a limit on small engine cpaacity due to expansion in Asian and South American markets. They need to sell those 20% V-6 Camry's or not sell anything. Read Wards or the Harbour Report and you will see that Toyota cannot turn the engine/transmission mix on a dime. Yes they do have more small cars in the portfolio, but very few of them are engineered to US crash and emissions standards beyond the Yaris and Corolla/Matrix that are here now. The Yaris has many more derivatives overseas that would fit in the US well, but they aren't engineered to come here in the current generation. Toyota does not have a 50 state compliant diesel. They have supply constraints in hybrid batteries that MAY abate by 2011 (or maybe not). Toyota will be OK, but they are not going to thrive on cars either the next few years as they will miss the huge truck/SUV margins. The $45K Hybrid Highlander will not sell in volume and they did not engineer the platform for a four cylinder in the current model. The RAV-4 V-6 models are the staple of the rental car fleets of late. They will feel pain the next few years no matter what you say.

[dav305z]

Honda is best positioned for this market because they never shifted from what they and other Asian manufacturers did in the first place. They've focused on the Civic and Accord to the point where's there's no real doubt as to their superiority over Toyota's stuff, and they never really entered the full size truck market.

Toyota will be significantly better positioned than GM once they get their production mix adjusted correctly, but I don't think they're as well off as they'd have been even five years ago. The Corolla and Yaris are competent, but by no means class leading. I'd put them at the back of the Asian pack, and perhaps even behind the Cobalt and Aveo. The only real advantage they have - and it is a big one- is a reputation for building bullet-proof little cars.

In other words, GM's main challenge right now is a marketing one. They are no so badly positioned that they cannot respond to what this market wants. Cobalt is stale, but it's not a dog either. Ford seems to be doing well enough with the far inferior Focus just by advertising the hell out of it, and GM's mid-sizers can easily hang in there withthe best of them (even the long-in-tooth G6 was up 26 percent in retail sales last month).

[AMERICA 123]

Originally Posted by paul8488

Exactly. I hate being a Toyota apologist, because I don't like them, but they just have to ramp down truck production and ramp up car production. May not happen in a day, but it's a whole lot easier than redesigning a new car like GM has to do in many cases.

It ain't quite that easy for 'ole Toyota - although most of the media erroneously seems to think so.

They are more boxed in - in more ways than most realize.

However, they have a couple or three real big battering rams at their disposal - 1.5 - 2.0 of which nobody else or few have in quite the same way

and our Domestics do not have at all - to bust down those walls of the 'box'.

It gets down to this for them - how much and how fast do you 'emergency spend' parts of the 40 billion 'cash' chest, same in regards to

'about' another 5 - 10 billion of this years worldwide profit, and finally the same in regards to all the billions already spent on all the heavy

vehicle platforms especially here in NA.

And, compounding all this is the goal to be number one worldwide - last year, along with the need to continue to redirect some serious powertrain

effort - and then integrate it rapidly.

For sure its not about survival or even thriving in a midterm kinda' way but if they get it wrong..............its going to be more than just

embarrassing.

Contrary to all the BS and Spin, they ain't at their best in certain types of erratically changing situations - that's a Honda thing exclusively

- always was.

************************************************** ************************************************** *******

Looks a lot like the situation at the Battle of Midway in JUNE '42 - just before they decided to re arm the aircraft - changing over from land attack

to naval attack.

Everything going their way ...... from 7DEC'41 forward...... on the move and on the make for the end game .......... and then the USS Ford and

USS GM were spotted........

Btw, the Dauntless'es, if they appear overhead this time around are a composite or if you prefer, a coalition force.

[stormwatcher]

Originally Posted by AMERICA 123

It gets down to this for them - how much and how fast do you 'throw away' parts of the 40 billion 'cash' chest, same in regards to 'about' another 5 - 10 billion of this years worldwide profit, and finally the same in regards to all the billions already spent on all the heavy vehicle platforms especially here in NA.

Why would Toyota have to throw away part of their 40 billion dollar cash horde? There are profitable and are likely to add to their cash horde, only at a slower rate.

One point I think posters are missing is that the overall market is depressed in the North America at present and could remain that way for another year or two, so any supply contstraints on certain models will be lessened by the fact that demand is somewhat weak.

[camaro_freak]

Originally Posted by A Bum In A Bus

I hope and pray everyday that Toyota goes bankrupt, out of business, broke, implodes and goes up in a cloud of rice dust.

lack of maturity on this board never ceases to amaze me

'cloud of rice'? can you get any more racist with that type of comment?

[Kennyboy]

Originally Posted by steinravnik

All automakers are sputtering in this environment. Toyota is no exception.

Honda is an except to that rule. Except for the new Pilot and the TSX, their cars are highly desirable.

[Kennyboy]

Originally Posted by camaro_freak

lack of maturity on this board never ceases to amaze me

'cloud of rice'? can you get any more racist with that type of comment?

I double that. It's one thing to hate an automaker, but it's another to thing to use racial slurs to attack a particular type of ppl. I don't mind ppl attack ppl on their positions and ideology, but attacking them based on their skin color is stupid.

[roteague]

Originally Posted by camaro_freak

lack of maturity on this board never ceases to amaze me

'cloud of rice'? can you get any more racist with that type of comment?

Nonsense. No where did the poster allude to Toyota's race, nor did the poster say "Toyota, Honda, Mazda, etc." , nor to any other Japanese/Asian. You are jumping to unwarranted conclusions, and assuming racism, where you have no proof of the posters intent. Frankly, you owe the poster an apology.