On Tuesday Toyota forecast that its sales will rise 7 per cent next
year, to 8.03m units. It also pledged to sell 8.5m units in 2006 - or
the same as GM.
Moreover, in the metrics that truly matter to investors, Toyota is
already way ahead. In the first nine months of this year, its profits
were almost as high as the "Big Three" US carmakers combined. Meanwhile
margins were about twice as big - not least because Toyota, unlike the
Big Three, has not offered hefty sales incentives in the US, where it
now holds a 12 per cent market share.
This is why earlier this year I sold the last of the GM stock I had been
holding onto and bought Toyota ADRs.
The Toyota ADRs have appreciated nicely while the GM stock has continue to
Sad really, but the game is playing out and it is not playing out well for
the two remaining US based auto makers.
GM's only good news is that Ford will probably be out of the automobile
business before GM is. Both will keep making trucks for years to come, but
even there the news is not good.
Probably the only business hope for Ford and GM is to go through Chapter 11
reorgs like the airlines and jettison all of their historical pension and
healthcare liabilities along with union contracts.
That should tell you a lot about surveys. I have owned a hell of
a lot of different domestic and foreign vehicles in my time. I
only ever had one that was problematic, yet I see surveys that
suggest one brand is supposedly 'better,' based on the ONE
somebody complained about, that they had owned. Such surveys
never seem to quantify those that are serviced properly or not.
Surveys of older models do not distinguish between those
purchased new or used. One who buys a used vehicle can never
know for sure how it was used or abused, or if it was maintained
properly or not. Naturally if they have problem, they blame the
manufacture, never the previous owner(s)
In our business we service thousands of just about every brand of
vehicle, every week. Vehicles that are driven to higher
mileage's, is shorter periods of time, than by the average new
car owner. What we see is virtually little difference among
brands, other than style and price, when given proper preventive
maintenance. Every manufacture today is building good vehicles.
Just as every manufacture today is building some of them that are
not so good, on occasion. That is why they all have a warranty.
To chose a new vehicle of one brand over an other based on the
one that somebody else owed several years ago is a bit foolish in
For me the most important thing I look for is good dealer
service. The difference in the drive home price from dealer to
dealer of the same brand is generally similar.
The attitude of the dealership toward me as a customer was the
reason I switched from Lexus, to a domestic luxury brand, in 1999
after owning several Lexus'.
"James C. Reeves" wrote:
2009 was for the US market for passing D.C. By 2007 Toytota will be
the worlds largets auto manufacturer. And actually statistically there
is a good chance that it will be 2006.
GM's CEO when told of this was quoted as saying he doesn't doubt it
will happen. I'll try and find the link to his exact quote in the
Detroit Free Press newspaper.
Because GM's world wide (and US) market share has fallen in 18 of the
past 20 years and will again fall this year and probably next, Toyota
should overtake GM in 2006 instead 0f 2007.
What does this say about GM, will they admit how badly they've been
mismanaged into producing junk? Do we need another 'Road to
Redemption' campain which not only admits bad quality, but also poor
management and laziness?
It is all very sad. One of the many things Toyota has not done is to
distract itself with crazy schemes like buying, then selling EDS, buying,
then selling Hughes and so on. Toyota has been absolutely relentless in
focus and execution. Toyota also does not play the game of endless
executive hiring, firing, promotion and demotion with which the inbred
Detroit high paid "talent" pool wastes time and money on.
Toyota's is an impressive business performance.
Toyota does not have to deal with US corporate tax laws or US
tort laws. GM pays million in US federal Corporate taxes.
Toyota does NOT pay a penny in US federal Corporate taxes on the
millions it makes annually on the cars and truck they sell in the
US that they import, or assemble here in the US. You never see
the shark lawyer suing a Japanese corporation in the US. That is
because they can only be sued in Japan and their tort laws are
not as nuts as those in the US. Toyota also pays their employees
less, provides less desirable benefits and pensions even thought
their vehicles cost 20% to 30% more than the similar size and
equipped GM models. Even when Toyota does assemble some cars in
the US like the Camry, they assemble them primarily of lower cost
parts imported from places like China, not from parts made mostly
in the US as does GM. In the not too distant future Toyota will
import the Tacoma from Mexico and stop making it in the GM/Toyota
plant in California. How long do you think Toyota will assemble
the Camry in the US of Chinese parts when they get their new
Chinese plant finished? It will be cheaper to build the Camry in
China rather than making the part there and bringing them to the
US for assembly as they do now. We in the US better soon wise up
and buy American or everything we buy will be made overseas,
including all of the domestic brands. You don't think GM and
Ford will go out of business, when they too can build for less in
China as well, do you?
John Horner wrote:
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