Toyota President has renounced his firm’s 2002 goal of attaining 15 percent global market share by around 2010. “Our president doesn’t feel comfortable upholding figures as our vision,” an anonymous Toyota source tells Automotive News [sub]. “It is not the Toyota way to aim for 15 percent or 10 percent.” Which makes sense, considering Toyota is predicting a nearly 13 percent drop in global sales in the fiscal year ending March 31. Indeed, AN’s source blames the market share goal for Toyota’s current overcapacity struggles. Which indicates that the big T may have recognized the role of number-chasing in GM’s demise. If nothing else, its executives certainly understand the importance of emerging markets in driving sales. Perhaps because Volkswagen is creeping up on Toyota’s market share on the back of its Chinese and Brazilian business. You gotta dance when the floor keeps getting hotter.
Where has their global ambition gone? I am disappointed by their failure to grab the bull by the horns and dominate the global auto market.
“Uneasy lies the head that wears a crown.”
At the risk of sounding like a Toyota apologist, this is actually a shrewd move on Toyota’s part.
They expanded too quickly and the recession bit them on the bottom. Therefore, they have to correct themselves to adjust to the market. This means reining in market share targets. All it will do it force them to sell cars, quite possibly at a loss, just to meet the target, which (as GM found out) is a costly way to do business.
Toyota need to push in emerging markets, pretty fast. I’m not sure (though I hope I’m wrong) that the United States market, after correcting itself, will not go back to the levels is was before the recession, which will put more pressure on Toyota to get into new markets. China and India are Toyota’s best bets. When I went to Hong Kong, nearly everyone was driving Toyotas, so Toyota need to work on expanding that brand loyalty into China. I, personally, don’t believe that the Chinese-Japanese conflict will play any part in all of this. Many of my chinese friends and my experiences in China showed me that there is a deep respect between the 2 nations, just don’t mention the war!
India will be a little trickier. The key there will be cheap, which need to work on. I’m not quite sure how Volkswagen are working the Indian market, since their cars are 25% more expensive and 25% less reliable. Go figure.
If Toyota don’t get into the emerging markets soon, it may be almost impossible to get in once they are established. Look at Volkswagen in America….
KatiePuckrik :
August 10th, 2009 at 3:01 pm
If Toyota don’t get into the emerging markets soon, it may be almost impossible to get in once they are established. Look at Volkswagen in America….
——————————————-
I am not sure what’s your point.
If we look at VW in NA, it’s a perfect counter example to your statement.
VW entered NA way before Toyota did and dominated more than half of import sales. Yet, Toyota joined the fight late and beat the crap out of VW. Once again, it doesn’t matter who got started first. It’s the consistent delivery of value to customers that counts.
Honda didn’t even start building cars until 1968 and it is considered one of the strongest now.
WSN
The point is that even though VW entered earlier in America, they didn’t really take the market seriously.
Toyota came, got their arses kicked, went away and came back as Detroit’s nightmare.
VW came, got stuck in first gear and never bothered to change gear.
And while VW tried (half-heartedly) to turn themselves around, the market established itself.
Hence, the statement “If Toyota don’t get into the emerging markets soon, it may be almost impossible to get in once they are established. Look at Volkswagen in America….”
P.S. VW established themselves as a mainstream brand and set up headquarters in the US market in 1955 and Toyota in 1957. They pretty much started off at the same time.
Another example that maybe Toyota is not going to become the new GM. It is smarter to back down from market share predictions than to keep the goal when the only way to meet it is to overproduce.
KatiePuckrik :
August 10th, 2009 at 3:50 pm
Hence, the statement “If Toyota don’t get into the emerging markets soon, it may be almost impossible to get in once they are established. Look at Volkswagen in America….”
P.S. VW established themselves as a mainstream brand and set up headquarters in the US market in 1955 and Toyota in 1957. They pretty much started off at the same time.
————————————-
I still don’t see the “hence” part. You only elaborated that time of entry is not important. Quality of product is.
Your argument is further weakened by my Honda example. Honda is more than 10 year late in the game in the NA, yet it’s much much stronger than VW here.
wsn,
Honda followed Toyota business model (reliable cars and affordable prices) yet, they don’t have the market share of Toyota. If Honda came into the NA market earlier, maybe Toyota would be playing catch up to Honda?
I agree its not who is first, but how you market and what you market.
It’s true that first in has an enormous advantage.
You get brand recognition and the power to establish pricing.
It works that way in retailing of consumer products.
But there are untold major brands from when I was a kid that are gone today.
Being first should NOT be the goal.
It is an advantage, but not the goal.
I like what they are doing.
In fact, if GM had a board worth its suits, it would have recognized this years ago.
Not sure if they still understand this.
They still seem hell bent on numbers, not quality.
Without leadership, without a vision, it’s going to continue in Detroit
I think Toyota is speaking politically. Recall that, a couple of years ago, Toyota’s brass said, in effect, it didn’t want to be number one in North America because this could attract negative attention from those here with a vested interest in the Big Three.
Chevy was in the American market way before any of the brands discussed here (VW, Toyota, Honda), and is now in the ditch. Any I don’t care what Chevy’s market share is – they’re not making money and in business that’s the name of the game.
Yes, there’s some amount of brand loyalty that can make market share “sticky,” but worst can go to first and vice versa with just a few years of especially good (or bad) product and management.
It didn’t used to be the Toyota way to “buy” their way into markets by obtaining competitors, but this might work.
Suzuki is more-or-less a 3rd tier Japanese manufacturer of smaller cars, in competition with Toyota’s 50% owned Daihatsu brand. BUT Suzuki is VERY strong in China and VERY VERY strong in India with their Indian partner, Maruti.
What if Toyota and Daihatsu bought Suzuki and merged Daihatsu and Suzuki?
Suzuki-Daihatsu would be the worldwide operations name while Suzuki-Maruti would continue to be the name in India.
Toyota thought they could get that 15% in 2015 because they were big in America and gigantic in Japan(50%). Those markets tanked. They are nowhere near 15% in Europe(5%) or China and South America and nobody believes that it is even possible for them to grow their market share their enough to get to 15% world wide.
ps. Prius and its technology will help them enormous to grow their market share in Europe but that wont be enough
KatiePuckrik :
What i remember from Hong Kong was the near total absent of cheap cars on the road which i did see in Macao. I expect the Chinese Market to be more like Macao then the weird Hong Kong market.
ps, Hong Kong doesn´t make cars, China does so expect a totally different tax system
Toyota has launched a lot of models in the last few years trying to get as much of the market as they could, now, as it happened to GM, they have models which take sales of the others.
They had too much confidence in the sales in the US, too dependent on them.
And also, that most of Toyota models are considered bland and boring doesn’t help very much. Even Honda is trying to make more exciting cars, even if the new Accord looks like a BMW.
charly +1
Toyota got arrogant and overambitious when it made that 15% goal. Globally, both GM and VW have been gaining on Toyota this year. At least they are recognizing the folly of chasing market share for its own sake–we won’t be seeing Toyota execs running around with “15” buttons on their lapels.
That said, Toyota is falling behind in the fastest-growing markets, which is quite a serious problem for them. Both VW and Hyundai/Kia are well positioned to slice into a lot of Toyota’s global business.
Toyota’s idea of scaling back its ambition is a good one. One only needs to look at the quality of their entry level products to see where they are cutting corners to meet volume demands.
Although… Toyota is already in the Chinese and Indian markets, through its Thai-sourced IMMV program and the excellent Innova which Mike Soloviow so recently gave his hate (honestly, it’s better than the even worse competition…). What they lack is an entry-level small car program to court Indian and Chinese sales… which might mean trouble in the next five years or so, when those entry-level buyers are ready to move up to compact and mid-sized vehicles.
…because Volkswagen is creeping up on Toyota’s market share on the back of its Chinese and Brazilian business.
I think it’s more accurate to say VW is creeping up because the did zilch in North America and didn’t take as much of a hit.
VW’s relative “brilliance” is largely the result of being so incompetent for so long that when one market crashed they weren’t affected, while the markets they do have traction on only cooled slightly, or were heated artificially. That people are seeing this as signs of some kind of strategy and not the dumb luck that it actually was is swelling some heads at VWAG.
VW is brilliant in the same way that a runner with a bad training regimen would win a race because he/she was in the only track that didn’t have an oil slick in it.
It has nothing to do with being arrogant. They would have a shot at it if the American and Japanese market did drop so much and the Chinese market didn´t grow so much.
To me Toyota has a problem in emerging markets: expensive cars.
Yeah, they’re refrigerator reliable, but if for example they use the business model they employ here, they won’t grow much.
Chevy is number one here because it has: the lower price, most features, relatively attractive cars. In one word, value.
Toyotas, instead, are expensive and seen as status symbols. Even luxury cars :rolleyes:
They need affordable, full of value/content cars. And please, pepper them with some style/beauty.
Brazil?, can they sell a car like the Palio or Mille or Gol at those prices? Flex -> Ethanol or CNG or Gas fueled? Cheap and easy to fix? If not, they’re toast. Period. Fiat, VW, Ford and GM will eat their lunch there.
KatiePuckrik :
August 10th, 2009 at 5:57 pm
Honda followed Toyota business model (reliable cars and affordable prices) yet, they don’t have the market share of Toyota. If Honda came into the NA market earlier, maybe Toyota would be playing catch up to Honda?
———————————————-
Total market share is BS. GM still has the most market share in NA and that is not impressive.
The strength shall be measure by profit made by each car or each employee plus technologies in the pipeline. In that regard, Toyota is stronger than GM and Honda is stronger than Toyota.
So, no, Honda isn’t catching up to Toyota. Honda is leading. I believe Honda is the strongest car maker in the world today. And yes, they are making money again last quarter.
It has nothing to do with being arrogant. They would have a shot at it if the American and Japanese market didn´t drop so much and the Chinese market didn´t grow so much.
As relates to “down here”, Stingray basically gets it right. They (toyota) have no real entries into what sell here. OK, the market is changing and all, like 5yrs ago most entry level cars were sold w/ no power anything, no air con, and apparently cars like that are now “only” 50% of sales. The news for more than 4 yrs now is that Toyota will be selling the Yaris here. Hummmm, ok they’ll try at USD 15K and that will get them nowhere.
Perennial top sellers here are the VW Gol, Fiat Palio and Uno, which all sell at well over 20K units a month. Then you step down to the GM Classic which gets in about 15k sales/month. And from there on down it ‘s less than 10k a month. Toyota’s best seller here? The Corolla, seen as a semi luxurious car sold for over around USD 30k. Perennial second in its market, selling between 1.5 and 2k a month.
And whoever said VW is selling well here? Well, they’re second (after Fiat), but little by little, but surely, loosing market share every month. But since this will be a record year, they’ll have a record year in sales. But market share will be smaller than last year’s.