Toyota's production up; gap with GM narrows

Thankyou Jim and thankyou Winston.

We should have been fighting the terrorists after the first WTC bombing. We wouldn't have had 9/11.

Here I am reply to my own posting.

I post a non-OT topic and get only one reply. OT postings are multiple replies. Go figure.

It was interesting but final in itself. Didn't seem to call for comment. Happens quite a lot on Usenet. Thanks for it, though.

(Now, had you slipped in some gratuitous insults of Demonrats or Republigoons, we could be enjoying a lively thread of nonsense.)

Cheers Andrew, you seem like a fellow I'd have a beer with....

The real stuff, I hope? There are some decent micro-breweries in the US these days.

i think toyota ought to just go slow and not just crank out the cars to beat a target. if theyre selling? sure.

cranking em out, forcing em on dealers is a detroit trick, and just leads to crap quality and incentives to move the stuff thats been made.

and since 9/11 we should have been fighting terrorism in afghanistan, where the actual terrorists are.

Funnily enough, there was an "expert" on BBC-tv, two nights ago, who agreed with you. He felt that Ford (and thus presumably any car maker who wants to prosper) should switch to making a varied range of vehicle types that covers the likely needs of the focus market but restrict models within each type. This permits rapid ramping up/down of production as fashion and demand fluctuate; a production base that must be built before a market can be served is no bleeding use. How close to this ideal is Toyota already?

Roger that.

What makes Toyotas good is they depart from the old Detroit in workmanship and sales tactics. Personally I want stability in price and in resale value.

I suppose there are times the quarterback would like to take back that last pass that was intercepted.

I guess history will be the final judge.

In the auto business, vehicle inventory is measured in days supply. Basically, days supply is calculated by measuring how many vehicles are sold over a given time period and dividing the number of vehicles sold during that time period by the number of days in the time period to arrive at average sales per day. The number of vehicles in the inventory is divided by sales per day to arrive at days supply. For example, if a dealer sells an average of 2 Camrys per day over a 120 day period and has 60 Camrys in stock, then the dealer has a 30 days supply of Camrys. The shorter the time period used, the more responsive an automaker can be in adjusting production. I don't know if this is still the case, Toyota used to use a

120 day time period. The advantage of a longer days supply of inventory is more choices for their customers, and automakers get to have the dealers carry the inventory and keep their production lines busy. The advantage of a shorter days supply of inventory is that dealers' cost of carrying the inventory is lower, gross profit margins can be a little higher, there is less exposure to the automaker and dealer if there is a sudden downturn in sales, and there are fewer vehicles to get rid of at the end of the production cycle.

Dealers generally like to carry a 45 to 60 days supply of vehicles. Dealer inventory of Toyota's most popular models are in the neighborhood of 30 to

45 days supply, while slower selling vehicles like the 2006 Tundra was closer to 90 at the end of 2006. Toyota is adding production capacity to meet consumer demand and bring dealer inventories closer to 60 days supply.

Thanks. Interesting. Though, when I ordered my Prius the delay was 12 weeks, IOW 84 days, including shipping from JP. They may already have built the thing by the time of ordering, of course.

Toyota calculates dealer day's supply by counting vehicles that have either been allocated to the dealership or are in the dealer's inventory. Future production that has not been allocated to the dealership is not included in the dealer's days supply.

For a while, average Prius days supply was under 15, which makes delivery time for future production longer. Transit time from Japan to a dealership in the UK is probably 3 or 4 weeks; there can be a 1 to 3 week lag in getting an order into the production queue, and the rest of the time is waiting for previous orders to make it through the production line.

When I was Group Sales Manger, one of the first things I did was drastically reduce total inventory for the group. In some areas as much as 50%. Our import brands like Toyota had far fewer dealerships than GM and Ford. The partners were buying the old mom and pop stores, that were common with GM and Ford. I used them as inventory pools to supply our larger stores, that sold 500 a month or more, and knocked thousands off floor plan cost. In one case in PA we had four Ford stores within 15 miles of each other. I also relied more on the dealer pool. In our Lexus stores I could only carry eight or ten LSs per store. Rather than stocking 40 Camrys when I only needed 15, I could stock 20. The partners took notice when their floor plan costs were not ramping up that much, even though they were opening new stores in all six of the states in which we operated. ;)

mike

Smart move, though I suspect that if you were able to reduce inventory by half, your floor plan savings were more than just "thousands," more like tens of thousands ;-)

How do Ford and GM allocate vehicles from the dealer pool? Do they replace inventory if a dealer has depleted their inventory more than other stores or do they require some kind of special promotion like Toyota?