Toyota is now the world's number one automaker

[yoMAMA]

Great job Toyota!

Well deserved number one status.




http://www.latimes.com/business/la-fi-toyota25apr25,1,3981597.story?coll=la-headlines-business

latimes.com
http://www.latimes.com/business/la-fi-toyota25apr25,0,5824792,full.story
From the Los Angeles Times
AUTOS
GM's 76-year reign as car sales leader ends
By Martin Zimmerman
Times Staff Writer

April 25, 2007

Since the Great Depression, General Motors Corp. has been the world's largest automaker, a symbol of American economic power.

But on Tuesday the Detroit company lost its crown to Toyota Motor Corp. of Japan, which has been relentlessly chipping away at GM's global dominance. And now, as Toyota pulls into the passing lane, GM will only appear smaller in its rearview mirror.

"I've been in this business for 37 years, and what I'm seeing now is the continuation of a trend that I've observed for 37 years," said Jim Hossack, a consultant with AutoPacific Inc. in Tustin. "Toyota is getting stronger and stronger, and the Detroit Three are getting weaker and weaker."

Barring a merger of major auto-producing rivals, it's unlikely that Toyota's leadership position will be seriously challenged anytime soon. Years of missteps by the U.S.-based automakers have allowed Toyota to grab the lead by efficiently producing high-quality cars that are a hit with motorists.

"I don't see that there's any other company that will be able to exceed Toyota in terms of scale in the near future," said Marvin Lieberman, professor of policy at UCLA's Anderson School of Management.

The Japanese automaker said Tuesday that it sold 2.35 million vehicles worldwide during the first three months of the year. That topped the 2.26 million cars and light trucks sold by General Motors.

Toyota has been gaining on its U.S. rivals for several decades as motorists sought out cars that were better built, had higher resale values and, increasingly, got better gas mileage.

The event wasn't marked by celebrations at the automaker's global headquarters in Toyota City near Nagoya, Japan, or at its numerous U.S. assembly plants and sales and design offices. The key worldwide sales number wasn't even included in the company's announcement of its first-quarter vehicle production.

"It's only a quarter," deadpanned Mark Templin, vice president of Toyota USA's Scion division in Torrance. "It's just really not our focus. We never talk about it."

Toyota sold its first car in the U.S. in 1957, introducing a boxy, pokey four-door called the Toyopet Crown to skepticism, if not outright derision. Fifty years later, the company is wary of appearing too successful, fearing a possible backlash in the U.S. as it grabs buyers from GM, Ford Motor Co. and Chrysler Group.

Although Toyota still ranks third in U.S. sales, its share of the American market has jumped to 15.6% from 7.3% since 1995. GM's domestic market share has fallen from almost 33% to 23% during that period.

Perhaps recalling the resentment spawned during the 1980s by the surge in Japanese imports, recent Toyota ad campaigns have focused on the automaker's growing U.S. manufacturing presence.

The company may build as many as five new North American assembly plants by 2016 and broke ground just last week on a $1.3-billion factory in Mississippi that will produce 150,000 Highlander SUVs annually. That would bring its total in North America to 13 plants and add 10,000 jobs to its current total of about 40,000 in the region.

Even so, almost half of the 2.5 million vehicles Toyota sold in the U.S. last year were imported from overseas factories.

"There's always talk of a potential backlash, but I haven't seen any signs of it at all," said Jesse Toprak, senior analyst with Edmunds.com. "There will always be certain pockets in the U.S. that are less likely to buy a Japanese import. But they generate so much volume in the rest of the country that it's not a major concern."

In Los Angeles, the leading market for Toyota's gas-sipping hybrid cars, the automaker accounted for 28% of all new-vehicle sales last year, up from 21% in 2002, according to market research firm R.L. Polk & Co. GM's market share in L.A. has slipped below 14%.

On Tuesday afternoon, Hector Rodriguez, 51, was checking out a new Prius at Miller Toyota in Culver City. A self-proclaimed GM fan who recently bought his daughter a 2001 Yukon, Rodriguez was nonetheless shopping for relief from high gas prices.

"American cars take mucho gasoline. It's too much," he said.

Toyota's growth in North America comes as payrolls at the Detroit Three shrink. The U.S. automakers are saddled with billions more in healthcare costs for workers and retirees than their Asian rivals.

Toyota's ascendance comes even as GM, which had reigned atop the global auto pyramid since snatching the crown from Henry Ford in 1931, appears to be pulling back from the financial brink.

A year ago, the U.S. corporate icon was in such sad shape that investor Kirk Kerkorian was trying to force it into an alliance with auto companies from Japan and France.

But a restructuring of its North American operations that will slash 34,000 jobs, shutter 12 plants and cut $9 billion in structural costs has helped GM get a second wind. The automaker, which lost $10.6 billion in 2005, managed to turn a profit in the fourth quarter of last year and is expected to report another profit when it releases it first-quarter results May 3.

GM's first-quarter worldwide vehicle sales, though second to Toyota's, were a personal best for the American automaker, boosted by double-digit sales gains in Asia and Latin America. A good chunk of the falloff in U.S. market share, meanwhile, has been because of the company's conscious decision to drastically reduce low-profit sales to rental companies and corporate fleets.

Toyota's growth hasn't come without growing pains. The company's reputation for quality has been dinged by a series of vehicle recalls, including one of 320,000 Prius hybrids last year to fix a potentially faulty steering component.

The automaker's rapid U.S. expansion also is taking a toll on its workforce, according to recent news reports. Toyota plans to restructure its North American operations in an attempt to lower the strain on its engineers and production managers and reduce turnover.

"Being No. 1 is not all ease and comfort," said David Cole, director of the Center for Automotive Research in Ann Arbor, Mich. "There are issues that make it very, very tough."

martin.zimmerman@latimes .com

Times staff writers Ronald D. White and John O'Dell contributed to this report.

*

(INFOBOX BELOW)

Auto industry giants

General Motors

Founded: 1908

Headquarters: Detroit



Employees: 284,000

Chief Executive: Rick Wagoner

Brands: Buick, Cadillac, Chevrolet, Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn and Vauxhall

Stock market value:

$17.4 billion

Toyota

Founded: 1937

Headquarters: Toyota City,

Japan

Employees: 285,977

Chief Executive: Fujio Cho

Brands: Toyota, Lexus, Daihatsu and Hino





Stock market value:

$223.6 billion

Sources: Toyota, General Motors


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[haplesshobo]

This NYTimes article points out that its not just american cars that need to make a turnaround, but a company like Toyota has its own challenges to face. Toyota brand is all about quality, but there's been a trobuling amount of recalls recently. Is there some ceiling where after a certain amount of cars, its just difficult for quality control to keep in check? Or, did Toyota expand too much in these last few years, where its workers and management to supervise these workers hadn't fully absorbed the Toyota way?

DETROIT — At last year’s auto show here, General Motors and Toyota Motor seemed to be trying to steal each other’s core customers. G.M. unveiled the Chevrolet Volt, a hybrid-electric concept car, to bolster its green credentials. And Toyota took the wraps off its huge new Tundra, which has a big V-8.

Then they spent much of the last 12 months promoting these new directions. “We believe that fuel solutions should not only be about using less gas, but one day, no gas at all,” G.M. said in a Chevrolet commercial. In its marketing materials for Tundra, Toyota said: “It all comes down to one question. Does it have the guts?”

But at the North American International Auto Show in Detroit this week, the two companies traded scripts again, and went back to their respective roots.

G.M. used its firepower to unveil a high-performance Cadillac CTS-V, with a 6.2-liter V-8 engine and 550 horsepower, and the Corvette ZR-1, expected to get at least 600 horsepower.

“The breadth and depth of talent and passion in General Motors in terms of engineering talent, desire to do great cars, desire to design great cars, is unparalleled,” G.M.’s vice chairman and car guru, Robert A. Lutz, said this week.

For its part, Toyota boasted that it would build a plug-in hybrid by 2010, potentially beating the Volt to the punch, and showed off the Versa, a sedan/station wagon meant to capture even more of the baby boomers who comprise Toyota’s most loyal customer base.

“We wanted to put forth our message, which we hadn’t put forth as forcefully in the past,” said Bob Carter, group vice president for the Toyota division.

The shift in focus over the last year by the two companies speaks volumes about the challenges they face. In a sense, the world’s two largest automakers are each working on their own version of a turnaround.

Toyota’s once-sterling quality image was dented by a spike in recalls, and its green credibility was damaged by the introduction of the Tundra, and even by the ultraluxury LS 600h L, a performance hybrid with the equivalent of a V-12 that even environmentalists frowned on.

Toyota executives admitted they did not anticipate the force of attacks on the company over the last year from environmental groups. “We took a lot of hits,” said James Lentz, president of Toyota Motor Sales, the company’s American sales arm.

The barrage began when the Tundra was introduced early last year. Another volley came when Toyota joined the Alliance of Automobile Manufacturers, a lobbying group, in opposing an increase in federal fuel economy standards.

Toyota’s participation “struck a lot of environmentalists as the ultimate in hypocrisy,” said Jim Kliesch, a senior analyst with the Union of Concerned Scientists, an environmental group.

The alliance ultimately gave in to political reality, supporting a new law that will raise the corporate average fuel economy standard, known as CAFE, to 35 miles per gallon by 2020.

Mr. Lentz said the criticism was worth the risk, since the result was higher fuel standards. “We were willing to take that heat for what will be the good of the industry,” he said.

Some environmental groups disagree. “Their reputation as a green car company is absolutely inaccurate if not blatantly false,” said Nick Magel, director of the Freedom From Oil campaign.

His organization staged protests against Toyota at auto shows in New York and Los Angeles in 2007, and demonstrated against the automakers this week in Detroit.

Toyota is also trying to shore up its recent quality problems, reflected in sizable recalls. Toyota’s president, Katsuaki Watanabe, has issued a plea to employees to step up their vigilance on quality while the company tries to grab the lead on hybrids, of which it has sold more than 1.25 million around the world.

For its part, G.M. is trying to arrest a lengthy slide in sales and declining American market share by capitalizing on the early success it has had with the Chevrolet Malibu, an American sedan that looks American and which G.M. says can compete with top models like the Camry and the Honda Accord.

To be sure, it is still pushing ahead with its green efforts, like the Volt, which is parked front and center in G.M.’s sprawling display here.

But the benefits from that strategy are still years away, at least in terms of sales. G.M.’s effort to whip up enthusiasm for cars that can run on E85 ethanol got mired in a debate over whether the corn-based fuel is ultimately better for the environment than fossil fuels. (This week, G.M. said it was investing in a company that produces ethanol from agricultural and industrial waste.)

So now it, too, is back to basics, with cars shepherded by Mr. Lutz that G.M. hopes will generate excitement.

“G.M. has gotten religion for how to compete,” said Joseph Phillippi, an industry analyst with AutoTrends Consulting in Short Hills, N.J.

Mr. Lutz said, “We’re in much better shape than we were at this time last year, and in infinitely better shape in that respect than we were two or three years ago.”

Still, G.M.’s chief executive, Rick Wagoner, told analysts on Thursday that G.M. would offer more buyouts to hourly workers this winter and planned further cuts in some of its plants, saying it would assess the actions over the next few months.

For both companies, the rewards are enormous if they succeed with their turnarounds — starting with the title of the world’s biggest carmaker, which they traded bragging rights to during 2007.

In a sense, the upper ranks of the auto industry are starting to resemble the aviation business, with two strong players — Boeing and Airbus, G.M. and Toyota — in close competition.

“It’s going to be nip and tuck, year after year, after year,” said Mr. Phillippi, the analyst with AutoTrends.

[Yeahman]

If you're basing the "world's largest automaker" title on quarterly sales, GM regained their title in Q3 thanks to the weaker dollar.
They report their Q4 sales next week and admit that their sales for 2007 will be extreme close to Toyota's so Toyota may yet take that title.

[yoMAMA]

If you're basing the "world's largest automaker" title on quarterly sales, GM regained their title in Q3 thanks to the weaker dollar.
They report their Q4 sales next week and admit that their sales for 2007 will be extreme close to Toyota's so Toyota may yet take that title.

the "world's largest" as measured by volume is pretty much meaningless.

What matters is profits (Toyota is unchallenged in that area), quality (issues here), and stock performance, as measured by market capitalization.

[haplesshobo]

What matters is profits (Toyota is unchallenged in that area), quality (issues here), and stock performance, as measured by market capitalization.

Well, Toyota will always have an innate advantage for profitablility, all things considered. It doesn't face the same legacy costs as the US auto manufactures, who have to pay $1500 for every auto into its workers' retirement and healthcare fund.