TriShield

Toyota leaves Ford behind in global race



by James Mackintosh in London and David Ibison in Tokyo
Published: July 20 2004 13:55 | Last Updated: July 20 2004 19:08

Toyota Motor, the world's second-largest carmaker, is set to increase its lead over Ford Motor after boosting its sales forecast for this year as its American rival reported a loss in its automotive operations.

Toyota passed Ford in sales last year and said it expected this year's sales to hit 7.39m vehicles, up 9 per cent and 4 per cent above its earlier estimate. It is expected to remain the world's most profitable carmaker after making a net profit last year of more than twice that of its nearest competitor.

The success of Toyota - alongside smaller Japanese carmakers Honda and Nissan - has been an important factor behind the problems at Ford, as well as those at General Motors, the biggest producer, which reports second quarter results on Wednesday.

Japanese manufacturers have been able to steal market share from the American producers in their home market, recently starting to compete against US pick-up trucks and large offroaders, the most profitable vehicles. Toyota is also rapidly gaining share in Europe and is building new factories there as well as in China and the US.

On Tuesday the scale of the problem facing US carmakers was underlined when Ford slipped back into loss in its automotive business, although record financial services profits helped it beat its own forecasts for the second quarter.

Don Leclair, chief financial officer, said the company had deliberately sacrificed north American market share by reducing the least profitable sales.

He also warned that the high stocks of cars and trucks at American dealerships meant the fierce US price war - which has affected US carmakers more than European and Japanese rivals - was likely to intensify.

"Given the relatively high levels of dealer inventory across the industry we expect a tougher pricing environment in the second half of the year," he said.

However, Mr Leclair stuck to this year's target of pre-tax profits from carmaking of $1bn before one-offs. In the three months to the end of June the automotive division made just $83m, while restructuring costs and a write-down of the value of an investment in a hydrogen fuel cell company pushed it to a loss of $57m.

Toyota is aiming to take 15 per cent of the world car market in the next decade, almost exactly on a par with GM. But Fujio Cho, Toyota president, has repeatedly denied that he is aiming to pass GM.

Keith

****. I hope GM stays in there.

WECIV

I hope they do not if they keep forgetting who there customers are. I for one will be a Stang driver for my next car if all keeps going the same way. I would not drive anything that is GM just because how they have treated ppl like us. If I get another car today, what choice do I have???

Shinkaze

So now the big three are America (GM), Japan (Toyota) & Germany (DC) ....crappy...but there is a nice symetry to that.

Humanoid

iTrader: (3)

I hate all jap cars! I would rather drive a FixOrRebuildDaily. I dont care if it breaks every week.

Humanoid

iTrader: (3)

Oh wait I have a FORD ranger and it is very reliable.

TriShield

Cars like Camaros and Mustangs don't make companies profitable, best selling, rebate free, competent bread and butter vehicles do.

TriShield

I thought Volkswagen AG was larger than DaimlerChrysler AG?

WECIV

Sure they can be profitable. I just am not going to drive bread and butter.

Shinkaze

could be... wouldn't surprise me.

ZigZagZ

Just wait. In 25 years Toyota will be picking up the crumbs, because the Peoples Republic of China will be the home base of the largest automotive concerns in the world.

You just can't beat slave labor. Watch out Toyota!

Excal

It's not slave labor, it just seems that way to us because of years and years of overpay and simply spoiled ness. Compared to Most of the world, the pay is not that horrible.

China is Growing very powerful and rich, and American companies like Nike are help[ing that effort. So is our vice president though, but the country is so spoiled it doesn't care/see it.

Toyota is making more and more cars in America as well as honda, I think it's dumb to have loayalty to corporations with no face (or heart).

for all we know a japanese CEO is a major holder in GM, In this day and age Big corporations serve no country or flag.

WECIV

We need to stop helping our future enemies. These guys are bigger than Germany, Italy, and Japan, and they were a handfull!!!

slik98z

i dont forsee any countries going to war over car sales. the wayi see it. i have no loyalty to a car company. to me thats ******* retarded. Simple as that. youbuy a car that is reliable, that looks good and fits your budget. And with the price of the new Msutangs coming out, **** it if i would buy one of those. locally they will be over 30k. A 2002 ws6 locally with 20k miles will run someone around 23k. and on top of it, GM axed the fbodies...how beautiful. Thank you GM, you have acheived mediocrity.

I hate Rice. Domestic rice being the worst. Doesnt matter what badge is on the car or where it was made. Rice is one thing to argue about and to hate...a forgeign car market is not.

anyone know how much money a person makes at a GM plant just doing labor? I'll be pissed if anyone says anything more than minimum wage. cause a monkey could be trained to do that job.

ZigZagZ

Man your braking my rice bowl. Ofcourse its slave labor !

TriShield

Toyota makes their products all over the world, so does practically every other automaker. If it's more cost effective for an automaker to produce in a market's country, they will do so. It's been that way for decades.

GM engineers and assembles the largest percentage of their products in the US, so does Ford, and the Chrysler Group (even though they are now owned and operated by Germans). To compete globally as they have been for decades they are set up in many other continents as well, where some of their arguably best cars are concieved, like Holdens in Australia and Fords like the Mondeo and Streetka in Europe.

China is the newest, fastest growing, and potentially largest market outside of the United States for automobiles, naturally every automaker wants a piece of that pie and is opening plants there. Toyota is even opening a global for engineering there, it's possible future Toyota products sold all over the globe will have Chinese designed components. The labor there is currently very cheap, especially compared to Japan, the US, and Western Europe.

You also may want to note the lions share of profits made by automakers end up back in their home countries, when Holden profits in Australia, it adds to GM's bottom line in the US, exactly the same as Cadillac or any other GM brand. That does serve the country.