"[Cutting-back on U.S. light truck production] shows that Toyota is just as fallible as anybody else,” said Joseph Phillippi, a principal of AutoTrends Consulting. “They’re human after all.” Well gee, who'd a thunk it? I guess former Detroit News cheerleader (now ace New York Times scribe) Bill Vlasic couldn't resist putting the boot in, as the Brits would say. To be fair, the article is extremely fair in its assessment of the relative impact of the SUV/pickup truck extinction on the Big 2.8 vs. Toyota. And we get another glimpse of what makes Toyota the Automaker in Front. “By using this downturn as an opportunity to develop team members and improve our operations, we hope to emerge even stronger,” claimed Jim Wiseman, ToMoCo NA's external affairs Veep (sounds sexier than it is). Happy talk? "They have piles of cash and are as flexible as any company in the industry,” said analyst Maryanne "Where's GM's Sense of Urgency?" Keller. “This is probably a good thing for Toyota because, in their history, they have shown that adversity is what makes them stronger.” Not to mention the fact that doing less badly than your competition is the same as doing better.
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Toyota gets a downturn in trucks and what do they do? They shift production around to allow more manufacture of vehicles which are selling and decrease production of vehicle which aren’t selling. Logical.
GM get a downturn in trucks and what do they do? They carry on making said vehicle hoping for an uptick in sales. 3 years later, trucks and SUV’s still aren’t selling, then they start to cut production of said vehicles. Now they are left with unsold stock which ties up capital, which GM desperately needs to survive because of their short sightedness. Madness.
Toyota are prone to mistakes just like ANY other car manufacturer (i.e starting up a factory dedicated to making trucks, just as truck sales are declining). The difference is, Toyota had a contingency plan. GM didn’t……
Couldn’t agree more, Katie. Toyota — out front, pulling away (to use the old Goodyear tagline).
While the D3 have a jobs bank that pays people to do nothing, ToMoCo actually puts them to use in some gainful manner. By using the down time to upgrade skills and finish off those jobs that no one ever seems to have time to do, ToMoCo actually comes out stronger when business picks up.
I suspect that UAW work rules prevent the D3 from being able to replicate this process.
It’s travails not treveils.
KatiePuckrik – wow talk about living in lala land.
Toyota pay you for that statement?
GM/ford/chrysler all cut truck product this year.
And for the past 3 year truck sales were GREAT. what was the number 1 selling vechical in america? Thats right the f150.
Theres plenty for the import lovers to gloat about, why must you make up lies?
Taken the right way, this could be good for Toyota. There’s a real danger of success, past or present, convincing humans that their excrement is without odor. Eddie Murphy, George Lucas and GM come to mind.
opfreak,
Huh? Trucks and SUV’s have been on a slow decline for the past three years whilst oil prices have been steadily rising. Of which, GM DIDN’T make plans for, I refer you back to “not having a contingency plan”.
Incidentally, because the top selling truck was the F-150, that means trucks and SUV’s are healthy? Why don’t we look at those figures again and see, year on year, how truck and SUV’s dwindled whilst cars and fuel efficient models rose (Toyota Prius, anyone?)? Again, “not having a contingency plan”.
If Detroit followed your way of thinking, they’d carry on making trucks and SUV’s until they stopped being popular, then flap about like a bunch of headless hens and quickly bring a half-arsed small car from one of their subsidiaries.
Oh hang on, they did……
Jon Paul,
I agree. Even Toyota need a slapping from time to time. Reminds them to stay focused!
.
Toyota is successful because it is smart. It builds a full line of competent, desirable vehicles in flex plants that can quickly switch production to favor popular vehicles.
It’s called long range planning, a foreign concept to the Detroit-3’s overpaid dim bulbs.
KatiePuckrik
Lets just re-write history. Heck If you can make anything up, to help you go for it.
What company invested billions in new truck plants that just came online last year?
Thats right.. Toyota.
To say the big 2 dont have compentant small cars is just being blind. Both the coblat and focus are selling just fine.
To say toyota had a better plan then GM or ford, is just being stupid. Because they are falling just like the others.
But thats what import fanboi’s do. Beloved to their brand, blinded by hate, and ignorance.
And its amazing to see people falling for the toyota spin “Re-education”. When if GM would have said the same thing you would have been attacking them, and telling people they should be canned.
Talk about a double standard.
I can at least admit what toyota does wrong or right. You cant.
I suppose the only thing worse than screwing up and fixing the problem would be screwing up and not fixing the problem.
Corporations are just like people. Some learn from their mistakes and move forward. Others are unwilling or unable to break out of their cycle of poor decisions.
Makes you wonder then if the D2.8 aren’t the corporate equivalents of felons who can’t stay out of jail…or the guy sleeping under a bridge in a box.
The fact that the F150 was the best selling vehicle in America for so long surely demonstrates the failure of our educational system and the triumph of cable television.
…and people wondered how we ever elected the nitwit in the White House – twice!
Opfreak,
Judging by your last post I can only assume that you didn’t read my posts properly.
If you did, you’d notice that I said that Toyota are prone to making mistakes and, in fact, I cite the San Antonio factory as a prime error on Toyota’s part. I also wrote in the next post that Toyota “need a slapping to help them focus”. Hardly, “beloved to the brand”.
Also, Toyota have (as you put it) “falling just like the others”, but the difference is (again if you read my post properly) they are restructuring their production to accommodate for better selling vehicles and easing production on vehicles which aren’t selling well. Toyota haven’t made anyone redundant (apparently, Toyota haven’t had a mass redundancy or factory closure since 1953. I find this fact a little hard to believe, but apparently it’s true according to a news article I heard the other day) nor have Toyota closed a factory. They’ll retrain and put these people to work elsewhere. Just like they have done before and just like they’ll do again.
That’s the beauty of “Flexible manufacturing”. It allows you to bend and twist manufacture with the market in (almost) real time.
So, to say that Toyota had a better plan than GM or Ford isn’t “stupid” (as you put it), it’s actually correct…….
no need to get snippy people…
YES, toyota misread the market about pick-up truck demand when they made their plans to build their 2 truck plants – BUT, that was 3+ years ago…
ALSO, they have the ability to quickly correct this, consolidate their truck manufacturing and then use their ‘excess capacity’ to build the prius…
sounds a lot smarter than what other manufacturers are doing…
If Toyota had had 20/20 into this year, I think they would not do things that much differently. They have come a very long way in establishing the Tundra as a legit competitor in the full sized market, and they can gradually take share and LOTS of profit as Chrysler/GM slim down to whatever. They trained some of the San Antonio workers at Princeton from what I read and were able to ramp up production without denting quality. It was critical that these trucks be near perfect, and the very limited camshaft problem was the only widely-known defect as I remember.
Well, as much fun as this is…
If Truck and SUV sales have been declining over the past three years, why did Toyota jump in with both feet? They already had a competent truck that, in light of recent developments was more suited to todays climate than the ones they are now trying to give away and can’t. Sorry, but on this subject they come off looking even more lame than GM and Ford because GM and Ford were already here, on the precipus (spelling corrections, anyone?) of disaster, and Toyota jumped in with both feet.
@RalphSS:
How can Toyota possibly end up looking more lame? They aren’t the ones staring bankruptcy or hostile takeover in the face. And maybe the reason they did do that is to take a bigger share of the pie when one or all of the Big Three fold, even if it is smaller. And if or when the recession lets up, they’ll be in a better position than they would have been if they’d kept their “7/8 scale” offering.
This is a brilliant example of PR overcoming knowledge. Fact of the matter is that the level of flexibility between Toyota and GM plants is basically the same. Princeton IN makes BOF (Tundra, Sequoia)and midsize BFI (Sienna) vehicles, on two different production lines. So, they are ceasing production on the BOF line, and bringing in a variant of the currently produced model (Highlander), and throwing the labor and budget to that line. GM had the same vision with the Lambda vehicles, but decided not to fund the minivan variant
(http://blogs.motortrend.com/1006271/car-news/see-ya-gm-decides-to-kill-minivans-report-says/index.html),
so it never was developed, a victim of GM’s shortage of investment $$ relative to it’s brand/product portfolio (as documented quite extensively here). Toyota’s PR folks take advantage of the benevolent treatment they get from the public to spin the story quite effectively, portraying a perception of manufacturing flexibility advantage.
GM has had a different approach to the rebalance of car vs. truck production, mainly because of their general overcapacity. They are closing four BOF truck plants, and adding shifts at their very efficient car plants, which is achieving the same effect as Toyota’s recent announcment, in a faster timeframe, since plants don’t have to be retooled. And Toyota’s pious proclamation about their workers not suffering the indignity of layoffs? Tell that the the hundreds, if not thousands of Toyota temporary workers that will get the axe, a consequence of lack of union work rules. Guess they don’t count.
Frankly, i get a little tired of the 20-20 hindsight displayed here, claiming that the current situation was forseeable. Face it, almost EVERYBODY got caught out by this year’s energy price spike. Do you think Nissan or Toyota would have made the investments in going big in trucks (especially Toyota, bet they wish they were still tooled up for Gen 1 Tundra or even the T-100) if they “forsaw” the market cratering like this? Two strong sales years before this one probably means the GMT900 program is still a financial winner, even with the current sales climate (sorry about that timing there, Ford and Chrysler…..) And I’ve read rumors that the Koreans were thinking about the full size trucks as well, just didn’t have enough time to screw up big. Frankly, the only company that really stuck to it’s guns was Honda, god bless ’em, they know their strength, and how to make money with it.
CarShark Says:
July 11th, 2008 at 1:36 pm
@RalphSS:
“How can Toyota possibly end up looking more lame? They aren’t the ones staring bankruptcy or hostile takeover in the face.”
Because bankruptcy and hostile takeover wasn’t the subject of my statement.
I said “…on this subject they come off looking even more lame ” The subject being the truck and SUV market or “Truck and SUV sales ” as stated earlier in the post. If GM and Ford are staring bankruptcy or hostile takeover in the face, and it’s been on the horizon for 3 years, as Katie stated, then, by their actions they said “Hey! I want some of that!”
That’s how.
While the not-so-big 3 may have competent cars, my test driving experience says competent is about the best you could say about them. Compared to a Mazda3, the Cobalt is absolute rubbish, IMO. Less comfortable, less competent, and less fun. If you want to buy a Cobalt (or Focus), I won’t try to stop you. But thats what domestic fanboi’s do. Beloved to their brand, blinded by hate, and ignorance.
The fact that not only can they shift production from trucks and SUVs to more fuel efficient cars, but are actually doing it speaks volumes about Toyota. As long as their suppliers can also switch to providing the necessary components for the Prius etc., in a timely fashion, Toyota will come out of this smelling like roses.
Assuming the US economy is such that anybody is buying anything by the end of the year, it’ll be interesting to see what happens to Cobalt sales when the new Civic plant comes on line. I suspect lots of people are buying the Cobalt and Aveo because they can’t get a Civic/Fit/Corolla/Yaris.
Sure everybody is getting hit by this, and I don’t think it was particularly predictable. Fine. Point granted.
Difference is, Toyota is STILL MAKING MONEY. All the money they’ve spent on these factories amount to a few months of profit for them. Mistake? Sure. But a minor one for a company the size of Toyota.
GM wasn’t making money before this went down, much less the bleedout that has to be going on now.
Toyota was a healthy company, healthy enough to eat a few errors and still make money even in the worst auto market in 50 years. The domestics were fundamentally unhealthy companies, which is why they are getting slammed by a this spike.
And that is the real story.
Ok, I’m going to the wall on this one. Why? I don’t know.
When is building a billion dollar manufacturing plant (just guessing) line up all the supplier support, recruit, hire and train hundreds of employees, etc. to build a product that indicators say is for a dying market, and then the market dies, a “minor” mistake? Is it when you are in good financial shape? If so, then when GM and Ford set their sites on that market it was a minor mistake, too, because they were in comparitively good financial shape when they did it.
A rose is a rose….
Moe! Larry! Cheese!
I think most of the domestic fans here are missing the point that Toyota was going to enter the full-sized Pick-up and SUV market regardless of the current energy situation.
The key to Toyota’s move into this segment is that one (or two) of the traditonal players will no longer be around for long.
Another way to look at it is IF Toyota wanted do put the final nails into GMs coffin attacking GMs last stronghold is that why to do it. Toyota already has GM beat in just about every (if not all) segments so what else is left?
Why is it that the domestic fans appear to have the same short-sighted mindset of those fools that are currently running our auto industry into the ground? Why is it that none of the DFBs have mentioned the LONG TERM here? Like it or not Toyota and Nissan are actively GROWING their businesses here in the USA at the sametime all of the domestics are shrinking.
I think Toyota goal is to setup a stable Pick-up SUV business and than CONTINUE (BIG IMPORTANT WORD HERE)to improve it and add sales over time. Isn’t this the same philosphy and practice they used for the car market?
As the profits of GM and the rest continue to slide Toyota will also be in an excellent position to compete on price alone, if need be. With a ful line up of profitable cars and the only real hybrid game in town Toyota has a great deal of leverage and cash to play with in the Pick-up market. How much $$$ will GM have to invest in R&D for the next model and how much $$$ will Toyota have?
Never forget Business IS WAR and right now Toyota is attacking GM on both flanks and with a good ole frontal assualt.
I think the biggest problem with this series of comments is the inability to recognize that, first, Toyota messed up. What is going on there is not that different than what is going on at GM or Ford, except Toyota is financially more stable. GM’s incentives were up YOY, their sales were down 18%. Toyota’s incentives were up YOY to a record, their sales were down 21%. Ford’s incentives were down significantly YOY and their sales were down 28%. Inventories of small cars at all three were bad. Each could have sold more with additional (and better optioned) inventory. However, there is no way Toyota could have made up the 50k units they lost with better inventory, let alone hit their existing levels with lower incentives like Ford. They were destined to be down regardless.
The second issue is this belief that GM or Ford are not adapting. As far as we can tell, they’re adapting as well as can be expected. Closing plants and slowing lines as necessary. Upping shift where they can. Ford is even moving workers from truck lines to car lines (Kansas City and Wayne are two examples where a third shift is expected to be added from former truck plant workers). None of them can up and change their BOF lines to unibody lines producing cars. Toyota is ceasing production of the Tundra in Indiana, but it isn’t putting the Highlander into production on that line – it’s using the Sienna line next to it. Both models have shrunk so much that they can support production on the same line. All their resources are just being used as efficiently as they can.
Toyota hasn’t created some magical system whereby they are capable of producing just any car on any given line. Honda is the closest, but that’s because everything is basically built off of 3 or 4 unibody platforms.
Credit where credit is due. GM and Ford are adapting fairly well. The historic perspective was to just keep producing to keep the UAW workers busy. However, now, they lay them off or reassign like any good business would. The jobs bank might still exist, but they aren’t just dumping people into it. Training, maintenance – basically everything Toyota is doing – Ford and GM are doing with their workers as well. The full story is that no one is immune. No one.
Anyone have the numbers on how Porsche Cayenne sales are trending?
I personally have never lived in an economy this bad. This has a feel of 1929. That said the domestic 3 will probably come out of this stronger than ever. Toyota on the other had may blow their doors off in the short run. Honda may as well. The domestic companies are very large MNC’s and this will be their life line. Same with Toyota and Honda. If the world doesn’t fold in on itself all will be well in the long run. If I were to invest in one though it may be Honda.
Uh, we’ve known for years that we needed more cars, but only THIS year have GM and the other two acted like they knew it too.
Toyota was selling good cars that whole time. So was Honda. Heck, both sold good small cars when gas was 80 cents a gallon.
GM displayed an active loathing for people who might actually want small cars for years and years. Revisionist history does you no favors now, fanboys.
I agree that Toyota may have made a mistake in opening the new truck factory in SanAntonio, but it just seems that they are reacting better to the changes in the market than Ford or GM. It could just be perception, or it may just be that they started with a leg up in the fuel efficient car market. One thing is for certain, that Toyota could better afford a misread of the market or to lose money in order to get into the truck market in a big way (I believe it was a combination of the two). GM had already pissed away their past profits on other mistakes and was not in a position to ignore the iceberg of high gas prices while fiddling away on the deck of their Escalade sales.
Well…it may sound like 20-20 hindsight, but I thought Toyota was dumb at the time to jump in with such huge trucks. The T-100/Titan filled an important niche, could haul just about as much as the bigger trucks, and was praised for its nimble feel and handling. I thought Toyota should have continued to dominate that “slightly smaller niche”, even at lower volume levels. That sure would have looked smart now. They didn’t ask me; oh well.
TMC screwed up badly with the big trucks.
They got sucked in by the craze, and forgot what their brand is supposed to be about – lured by the margins.
I’ve taken some stick here for voicing my disappointment over that decision – and it doesn’t really help that they spent time designing doorhandles and radioknobs that could be operated by someone wearing workgloves.
Toyota grew big by building three cars out of the same amount of resources that GM built 1.8 cars with.
And when Toyota decided to get into the 1.8 game, they suckerpunched themselves.
A few things:
Toyota’s plan for a LONG TIME was to enter the truck market with a legitimate contender. Before any of you mention the old 1st gen Tundra was “good enough”, no it wasn’t. It didn’t have a strong enough engine, it’s towing capacity was too low, and the truck itself was too small. It was also too close in size and capability with the Tacoma.
Regardless of the energy situation, Toyota’s plan was to enter the truck market with a strong contender (the new Tundra). Toyota KNEW the truck market would shrink, but they wanted more marketshare. Toyota simply wanted a bigger slice of a smaller pie. What is so hard to understand about this?
As for all the bashing and criticizing of Toyota making “poor” decisions or losing lots of money on the San Antonio plant … let me just say that Toyota has not had a loss in OVER 50 years.
Let me say this again: Toyota has NOT had a loss in over 50 YEARS.
Some of you need to REALLY think about this fact before making silly statements and criticisms of Toyota.
Agreed, because it is outright blasphemous to speak ill of Toyota.
For many years Toyota was not a factor in the best selling sector of the US light vehicle market, the full sized pickup truck and it’s SUV platform-mates.
The current Tundra and it’s new factory in Texas were massive strategic investments aimed at what was then the sweet spot of the US market, which sweet spot Toyota was not a tier-1 player in.
Contrary to recent spin, the downturn in this market didn’t start until well after the new Tundra came to market and well after San Antonio was on line.
Toyota’s other product lines are so solidly profitable that they didn’t need to borrow a penny from anyone to make a massive investment going after what was until recently the heart of the US market. Now, obviously, that investment looks very poorly timed. Were the key decisions being made today, I highly doubt Toyota would have done what they did. But, the key decisions were made five or more years ago when things were very different.
The failure of the 2.8 is that they are completely dependent upon a narrow sector of the US market for their gross margin dollars. Had they made a big bet five years ago to really take it to the imports in the sub-compact, compact and hybrid marketplaces they would be heroes today. But, they didn’t.
Toyota has certainly made some mistakes, but so far they have retained a far more balanced product portfolio than has Detroit and that is giving them a long term advantage.
I would argue that what has happened with the Tundra has been just as bad for GM, Ford and Chrysler as if the truck would have been a huge sales success.
Toyota launched a competitive truck. When sales were slow, they piled Detroit type incentives on the vehicle in an effort to generate their projected volume. GM, Ford and Chrysler matched these incentives to ward off the challenge and maintain their own sales volumes. However, in doing so, GM, Ford and Chrysler significantly reduced the profit margins on their products most critical to each company’s revenues.
Now with the contraction in the full-size truck segment, Toyota quickly changes gears moving all of its Tundra and Sequoia production to Texas in order to change over to in-demand fuel efficient products. GM, Ford and Chrysler lay off more workers and shutter excess plant capacity.
There is more damage done by the Tundra to GM, Ford and Chrysler than is evident from reading sales charts.
Lichtronamo
There is more damage done by the Tundra to GM, Ford and Chrysler than is evident from reading sales charts.
Excellent point. As we pointed out eons ago, the new Tundra squeezed the D2.8’s pickup truck margins but good. And will continue to do so. Hell, Toyota could afford to GIVE Tundras away and sink the D2.8. Now THAT’S scary.
Producing the Tundra was not a mistake!!
The Tundra is a good truck. The slumping housing/construction is hurting the full size truck sales. That includes all full size trucks not just Toyota.
A mistake is not adjusting to market conditions. Toyota is adjusting to market conditions with the reduction and shifting of products. Plus, utilizing all their manufacturing plants.
RF:
I really think Toyota is trying to give the Tundra away to bury GM in a less obvious way to the American consumer than selling twice as many Camrys/Colloras (and at a profit) as Malibus/Cobalts. How can the average Joe blame the Tundra for GM’s downfall when it sold 1/4 the volume of the Silverado/Sierra and other derivatives?
Producing the Tundra was not a mistake!!
The Tundra is a good truck. The slumping housing/construction is hurting the full size truck sales. That includes all full size trucks not just Toyota.
I used to live out with the Loggers, they say a Toyo is as good as T H Lawrence’s Rolls Royce is just about toonies here in Canada. They only need to fill gas, and goes forever, just like Energise Bunny.
If t weren’t the Economy tanked we will still see the big 3 trucks got tanked. The F150 hasn’t got the reliablity close to the Toyos. Probably Tundra will out sold them again.
Loggers knew these trucks could save their a**es, when truck dies he dies.
Another fnd who has fairly new local truck, for some reason he needed to get out of truck to check somethng. Suddenly the truck has mind of ts own fired the power locks locked. Rendered him truckless on a -40 cold outside God frosaken isolated logging road.
He was blessed as the good Lord had send somebody along to give him a ride. Or else he would be a Icicle until someone looked for him.
the new Tundra squeezed the D2.8’s pickup truck margins but good. And will continue to do so. Hell, Toyota could afford to GIVE Tundras away and sink the D2.8. Now THAT’S scary.
Thats not scary but reality, as Toy trucks were built like Sh*t brick house, no different than a Corolla from 70’s than a Vega from same era.
s funny a intact Vega worth lots more than a same Vintage Rolla now, go figures.
The honest truth many of us had good rapport with Toyos they’re reliable.
Remember my bro has a decent shape late 60s Rolla and we drove it around for yrs durng the early 80s. could a Vega lasted that long? My fnd bought a new Vega then, luckly he made it here from Ont to BC without resorting to Grey Hound.
SO how many folks get burned on a Vega?
Today GM’s predicament is it avoidable? Is more of what goes around comes around.
As much as some of you get vicarious pleasure out of Toyota trying to “bury” the D2.8, that’s a provincial perception, and frankly is just not how their minds work. They aren’t trying to kill the 2.8, frankly, they would rather not have to contend with the political pressure that would cause. But more to the point, they don’t play the game like a football game, lined up against an opponent across the line. They play it more like golf, where the battle is against the environment, and their mission is to play each shot a little better than the last one. They have learned over the years that if they do that, the rest will fall into place. They are certainly aware of the situation with their big competitors, and are going to take advantage of whatever they can. But they are in the business of taking care of their customers, not in the business of punishing their competition.
Robert, per your last email I am treading lightly. I guess opfreak is on better terms with you than I am. Anyhow…
Facts are facts; Toyota is the strongest automobile manufacturer in the world. Currently on the NYSE Toyota’s stock is $90.60 per share, Chrysler oh wait they are 80% “Privately” owned and nobody cares about them anyway, Ford’s stock is $4.86 per share, and the General is $9.92 per share. So everyone that is down on Toyota or the Tundra, get a grip.
No, I do not own a Toyota nor do I work for them. Toyota’s business plan is to have a vehicle for every segment, they now do (super duty’s are still in the works). A “real” full sized pickup was one of the last pieces to the puzzle. If the U.S. market stops buying large SUV’s and trucks all together, guess what? The Toyota plant in Indiana and San Antonio will be pushing out Corolla’s, Camry’s, Prius’s, Matrix’s, Yaris’s to fill the demand.
Flexibility and diversity is the key to a profitable company. If you need proof, look at Honda’s or Subaru’s balance sheet. Skooter, the Tundra is not a disaster. The demand for a full sized pick up is.
Ryan
And the collapse in demand for those full size trucks is much more damaging to GM, Ford and Chrysler than Toyota(or Nissan).
opfreak Says:
To say the big 2 dont have compentant small cars is just being blind. Both the coblat and focus are selling just fine.
Your argument is not “compentant” (sic) for two reasons.
First, the issue with the two domestic small cars you mentioned is not in simply being competent. The term “competent” implies simply getting the job done; what’s crippling the domestic automakers is the lack of competitive products to pit against other players in our free-market economy. Drive a Cobalt and a non-domestic branded competitor back-to-back, and there is a definite gap in how refined the drivetrain is, as well as simple things such as seat comfort.
Second, putting aside the argument of whether domestic small cars are as good or better than their non-domestic branded competitors, there is the simple point of profitability. GM and Ford carp that they make little or no profit on the Cobalt and Focus, respectively, and some who frequent this site maintain that the domestic automakers in fact lose money on certain small car models. Many blame this on CAFE, saying that the small cars were once sold at a loss to offset the effects of gas guzzler sales when the fleet average was calculated.
In any event, it’s probably not too far-fetched to state that domestic small cars are not nearly as profitable as trucks and SUVs, if they are profitable at all. Because of this, even if every Corolla/Civic/Sentra buyer in the United States were to suddenly choose to buy a Cobalt, Focus or Caliber, it’s doubtful that the domestic automakers would see an economic turnaround of miraculous proportions.
No, I do not own a Toyota nor do I work for them. Toyota’s business plan is to have a vehicle for every segment, they now do (super duty’s are still in the works). A “real” full sized pickup was one of the last pieces to the puzzle. If the U.S. market stops buying large SUV’s and trucks all together, guess what? The Toyota plant in Indiana and San Antonio will be pushing out Corolla’s, Camry’s, Prius’s, Matrix’s, Yaris’s to fill the demand.
The U.S. market has pretty much stopped buying large SUV’s and trucks, so why hasn’t Toyota been pushing Camrys, Priuses, Matrixes, and Yaris’ through that plant to fill the demand?
quasimondo Says:
…why hasn’t Toyota been pushing Camrys, Priuses, Matrixes, and Yaris’ through that plant to fill the demand?
Give them time, quasimondo, give them time…but not as much time as the domestic branded automakers will need.
For the domestics, an unfortunate benefit of the Japanese automakers’ investment in U.S. production is that their facilities are fairly new, and thus more adaptable to production changes.
Unfortunately, our tax code does not provide incentives for domestic manufacturers to invest in new facilities, since that’s treated as a capital investment rather than as a business expense. Contrast that to foreign automakers, who have local and state governments falling all over themselves to give tax breaks for building in a particular location.
Granted, foreign investment in the U.S. is a good thing, but the tax code and these incentives may be at least partially responsible for the “production technology gap” that exists today.
The Focus is competent. The Cobalt is a punishment. The Aveo is ridiculous. Big difference between the first one and the last two.
(Why on earth would you want to buy a small car only to get the relatively poor mileage AND awful quality of the Chevies in that list? At least the Focus is mediocre)
Give them time, quasimondo, give them time…but not as much time as the domestic branded automakers will need.
For years all I’ve ever heard about Toyondissan is how their plants can be easily adapted to build any car at any time and how nimbly they can move in the market. Having the Indiana and/or San Antonio plants retool rather quickly would’ve confirmed that, but this isn’t happening. Toyota says there’s a Prius shortage in the U.S., so why wait until 2010 to ramp up production at a plant yet to be built?
Have claims of adaptability been overstated?
A NYT writer bashing Toyota?! Must have found out the Tundra is made in the U.S……
M1EK:
…The Aveo is ridiculous…
(Why on earth would you want to buy a small car only to get the relatively poor mileage AND awful quality of the Chevies in that list?)
The Aveo, horrendous little monster that it is, is manufactured by Daewoo. It’s Korean.
I didn’t really need to point that out, as it doesn’t change the sentiment. I just enjoy spreading bad news, for the same reason I like telling little kids that Santa isn’t real. Cheers!