Toyota's Chairman Urges Japanese Car Cos. to Raise Prices to Help Ailing U.S. Rivals

Toyota's Chairman Urges Japanese Car Cos. to Raise Prices to Help Ailing U.S. Rivals

TOKYO April 26, 2005; Yuri Kageyama writing for the AP reported that Toyota's chairman is urging Japanese automakers to raise prices or find other ways to even the playing field with ailing U.S. rivals General Motors and Ford in hopes of heading off a possible protectionist backlash in the crucial North American market.

Toyota Motor Corp. Chairman Hiroshi Okuda was quoted by Japanese media on Tuesday as saying the plight of General Motors Corp. and Ford Motor Co. could result in problems for Toyota and other foreign carmakers.

Okuda told reporters Monday that Japan's auto industry must consider a response, such as raising car prices in the United States and cooperating in technology.

"We need to give some time for American companies to take a breath," Okuda was quoted as saying by the Nihon Keizai Shimbun, Japan's biggest business daily.

"I'm concerned about the current situation surrounding GM. Although a trade conflict, like ones (that) happened in the past, may be avoided, there may be some impact (on Japan's car industry) because the car industry is symbolic in the U.S. economy," Okuda was quoted as saying by the Japanese daily Asahi Shimbun.

A Toyota spokeswoman on Tuesday confirmed the quotes from the two newspapers, but added that the company has no plans to raise prices on its U.S. models.

Speaking on condition of anonymity, the spokeswoman also noted that Okuda was speaking in his capacity as the head of the key Japanese business lobby Keidanren.

Toyota and other Japanese automakers were the target of U.S. workers' outrage in the 1980s. The Japanese were accused of robbing jobs from American workers and market share from U.S. automakers.

Such sentiments have since subsided because Toyota and other Japanese automakers increasingly produce cars in the United States, creating jobs for thousands of Americans.

But Okuda's comments appeared to be an attempt to stave off any possible backlash. His remarks also suggests that he sees the American automakers as needing help to compete with Japan's car companies.

Last week, General Motors reported a loss of $1.1 billion for the January-March quarter, its biggest quarterly loss in more than a decade, partly because the Detroit automaker has been losing U.S. market share to Asian manufacturers.

While faring better than GM, Dearborn, Michigan-based Ford is also losing market share and says it could sink post a loss or break even before special charges in the second quarter.

Toyota, which reports earnings next month, has been consistently boosting global sales. It has a reputation for reliable fuel-efficient cars, and has an edge over rivals in environment-friendly hybrid technology.

Toyota, based in Toyota city in central Japan, has passed Ford to become the No. 2 automaker in global vehicle sales. Some analysts believe it's just a matter of time before it catches up with GM, the world's biggest automaker.

Other Japanese automakers are also reporting a robust performance.

On Monday, Nissan Motor Co. posted record profits for the fiscal year ended March 31 with U.S. vehicle sales surging 18 percent from a year ago. Honda Motor Co. reported a 5 percent increase in fiscal year profit Tuesday as sales climbed to a record for the fourth straight year.

Source: aut channel

Wow, that is quite sad and somewhat funny at the same time. They're thinking of giving the U.S automakers a crutch. A sign of how bad things have really gotten for the big-2 :o.The Toyota chairman wants to give them time to "catch their breath". It's like pummeling some poor fool till he's inches from passing out and dieing and saying "hey, i'll give him time to catch his breath so his big brother doesn't come down hard on my ass". That's the closest analogy that comes to mind, hehe.

But the guy is pretty serious. Are his worries unfounded or is the threat of a backlash really there? I mean, we do live in a free market but the U.S economy needs Ford and GM to survive. Will they (U.S gov) take such drastic measures to ensure the Big 2's survival? @ the expense of imports?

The domestic automakers don't need a crutch, they need to resolve their problems and put it behind them 100%.

The Japanese are HUGE fans of Deming...and killing off your competitors is not something he taught. Competition can be a good thing for all parties...

It's bs. The Japanese car companies are not being magnanimous here. The yen has been steadily rising against the dollar for a while now, cutting into Toyota's profit margin. Additionally, Toyota realizes that if GM and/or Ford collapses now, they would pull the entire NA auto industry down with them. They want the domestics to continue to die slowly, allowing them continue to grow in a stable market.
This cover allows them to justify their price hikes to the American media, and also allows them to humiliate the domestic competition. The message is clear: we are your overlords, and you exist now only because we want you to. How arrogant.

The only "backlash" I could see is from the U.S. Government itself. Let's face it, there are millions upon millions of Toyota/Honda lovers out there who swear by them, and refuse to even look at a domestic product because their old Pinto was a pile ( :rolleyes: ). And I'm sure a good fraction of those people wouldn't care in the least if Japan steamrolled the Big Two into non-existance. Check out the Detroit News auto talk forum for a real eye-opener....heck most of those knuckleheads are cheering for such a thing to happen. :mad:

The only "backlash" I could see is from the U.S. Government itself.
That's what he is talking about, I'm sure.

Whats funny is that if they raise prices on there cars people will still pay them just because they are getting a better product than GM or Ford.

Whats funny is that if they raise prices on there cars people will still pay them just because they are getting a better product than GM or Ford.

Maybe in the family appliance/people mover segments, but Japan will never do a better truck (they've narrowed the gap but GM and Ford learned their lesson from the car segment) and Japan will not be able to do an affordable, competitive sports car (the 350Z was a decent attempt, but they have no idea how to do a Mustang-type car profitably.)

Maybe in the family appliance/people mover segments, but Japan will never do a better truck (they've narrowed the gap but GM and Ford learned their lesson from the car segment) and Japan will not be able to do an affordable, competitive sports car (the 350Z was a decent attempt, but they have no idea how to do a Mustang-type car profitably.)

In those two segments, the domestics still own.

That still seems like a kick in the teeth to GM and Ford. Maybe the Japanese wanted it to seem that way, as well.

The only reason the domestics will still own in trucks is fleet sales. For has already taken a hit this year in truck sales due to toyota and Nissans entries. They are off 7%.

Maybe in the family appliance/people mover segments, but Japan will never do a better truck (they've narrowed the gap but GM and Ford learned their lesson from the car segment) and Japan will not be able to do an affordable, competitive sports car (the 350Z was a decent attempt, but they have no idea how to do a Mustang-type car profitably.)

Well I think they are catching up in the truck segment, but are still behind. How many other car makers are doing the Mustang-type car. One, Ford with the mustang. I see more civics, eclipses, integra, VW's, than I do mustangs so I am sure they aren't too worried about that.

The only reason the domestics will still own in trucks is fleet sales. For has already taken a hit this year in truck sales due to toyota and Nissans entries. They are off 7%.

Only fleet sales? I don't know about that.Take a look at the road and count how many new 2004+ F-series trucks that you see and compare it to the number of newer tundra's and Titans combined. It's not even close. They sell very well on their own, without fleet.

That and they're actually excellent products. You can't say the same about their bread and butter cars.

So the domestics know how to build a truck and affordable sporty cars, those areas they don't lag behind in. It's everything else that they lag behind in.

Fleet sales in the truck market are not exactly the same as fleet sales in the car market. Fleet cars are almost always rentals, or government go-fors. On the flip side, fleet trucks are working vehicles, where reliablity and ability are paramount to all else. The Japanese, to my knowledge, are still behind in this, for the simple fact that they dont really offer work versions. (IE: Rubber floors, manual trannies, cheap steel wheels, bed options [box beds, locker beds, etc], things like that.)

*** trucks may be fine for personal use, or even off-roading, but I dont see them seriously vying for the fleet market as of now.

I'm watching Titan sales closely this year. They are way up so far, curious if Nissan sells as many as they wanted to sell. First import to really be competitive with domestics in the full-sized light-duty class.

Rumor has it that both Nissan and Toyota are thinking about offering 3/4 ton versions of their pickups, probably with their next generation products.

-B

Not so fast.....

http://money.cnn.com/2005/04/26/Autos/toyota.reut/index.htm?cnn=yes

and refuse to even look at a domestic product because their old Pinto was a pile ( :rolleyes: )
Ha ha ha. Not quite though. Don't act like quality issues haven't been present in GM/Ford/Chrysler products all through the 90s. Pinto. Ha. You could replace 'Pinto' with at least half of the passenger cars offered by them and it would be the same thing.

You don't build product loyalty by consistently selling half assed vehicles for years. That's how you build a bad reputation. I don't reward people trying to pawn a crappy product by guaranteeing them my business for life. Good luck with that.

I have been very happy with the quality of the GM cars I have owned over the years. Friends of mine have owner Japanese cars, and have not found them to be significantly nicer in many respects.

The thing that is blatently obvious is that Toyota's Chairman had NO REASON to say his comments IN PUBLIC except to RUB IT IN THE FACE of Ford and GM. How often do you hear CEO's telling the public that they are going to raise prices across the board on their vehicles? That kind of thing is kept to the board room, for the most part. This is complete arrogance from the Japanese, hidden behind a veil of concern for the US auto market.

Wow, that article really bothers me.

Dan

Come on Bob pull a Dick Cheney and tell him to go "F*ck off!" :mad:
That would be the funniest thing EVER!!!

I would even buy that on DVD. :D

I'm watching Titan sales closely this year. They are way up so far, curious if Nissan sells as many as they wanted to sell. First import to really be competitive with domestics in the full-sized light-duty class.


I suppose the term "competitive" is relative. When you consider that the Titan is "up" in sales....and GM alone still sells almost 9 times as many light trucks as Nissan each year (on the long-in-the-tooth GMT-800 mind you), how truly competitive is it right now? The Tundra is even worse off. It could get real ugly when the 900 shows up...GM is once again putting their eggs in the truck and full size SUV basket. The new trucks absolutely MUST be the best in the market without a doubt...GM knows its revival is now depending on it.

My point with the Mustang (and any would-be Corvette fighter for that matter) was that the Japanese historically haven't been able to deliver a real performance oriented coupe at a reasonable price and make money. If they haven't by now, when would they?

My point with the Mustang (and any would-be Corvette fighter for that matter) was that the Japanese historically haven't been able to deliver a real performance oriented coupe at a reasonable price and make money. If they haven't by now, when would they?

Scions rock.

Hmmm...

Let's cover the Corvette's victims again, just for giggles:
RX-7 - KIA
300ZX - KIA
Supra - KIA
Porsche 944 - KIA
Porsche 928 - KIA
Thunderbird - KIA x 1.5 (the last car just flat-out sucked)
Viper - days are numbered...
GT40 - they didn't even try...
GT - tell ya in about 2 months...

Who's next? The line starts above.

This article, along with teh GM recall made it onto fark.com. The discussion section was a huge domestic bash session, as it always is over there. Probably a decent representation of the typical Americans thoughts on the matter, however uninformed.

And now we see how the Japanese shovel sh^t into the American companies' faces. Lets see how GM and Ford respond to the statement. Should be interesting.

corporate sh!t talking is quite an interesting development

might not have been nice, but then again the world isn't inherently nice.

its not like GM is being held down by something they cannot overcome to say the same thing back to the japanese in a few years... hopefully this is motivation.

I don't think this is $hit talking.

Think about it.

They can either raise prices, thus dropping sales a bit and letting the domestic companies recover yet at the SAME time increasing their profits. Or they can have the government do it for them by enforcing higher import taxations and such that cause the price to go up without any of the money actually going back to Toyota.

At least this way they get more money back to HQ to develop even better cars for the future.

You might recall that Imperial Japan was mighty full of itself on December 7, 1941 after they bombed Pearl Harbor. But they weren't feeling so very good a few years later, especially after August 6, 1945. It is amazing how history has a way of repeating itself. :eek: :) :cool: Perhaps it is time that GM and Ford arise to the occasion and take this fight right back to Tokyo!!!

Bottom line is that Toyota and the other Japanese manufactorers are able to say this because they can. They are in a very good position right now and are poised to continue this trend of gaining market share. I'm really worried for GM. They've already dug themselves into a hole that of only being held afloat by SUVs and trucks. And they're basically in a situation where they have to devote their efforts and capital on trucks while they neglect or half ass their car lines. I'd hate to see what happens when the truck/suv market falls flat on its face, and it will happen, probably sooner (gas prices gas prices gas prices) rather than later. GM seems focused only on the short term. The trend they are in now will not stop their declining market share. It may sound crazy, but can you imagine a GM that abandons passenger cars, and sells only trucks/suvs (assuming the demand is consistent)? It would take some substantial scaling back, but it may not be that far fetched.


Edit: We're far removed from WWII.

OK ...a couple of thoughts.....back when the Pinto was being built, the Japanese cars had a LOT of quality problems..esp. rust.

Wanna start to level the playing field? Don't raise the price of Toyotas....Take the huge Japanese imposed tarriff off of all cars entering the Japanese market from North America or Europe! It is NOT a level playing field by any stretch of the imagination.

As to 'built in North America'...the Average GM or Ford passenger car or truck has a content of about 86% North American content....the average Toyota has about 38%........

As to domestic truck sales being down 7%....what did you expect??? The pie isn't getting larger, folks, there's just more players.....thus, for every Nissan pickup sold, you can be assured that's one less Dodge, Ford, Chevy or GMC.

As to 'built in North America'...the Average GM or Ford passenger car or truck has a content of about 86% North American content....the average Toyota has about 38%........

I don't care about North American... I care about US content. I'd tend to guess that, of the "about 38% of Toyota's content", quite a bit more of that is built in the US than as with GM and Chrysler who love to build stuff in Mexico and/or Canada.

I'm sure the part content on the domestic cars is still higher, but what about assembly? Last survey I didnt actually showed a greater number of Toyota, Honda, and Nissan models were built in the US than were GM (ignore the North America crap... giving labor wages to Mexicans is no different than giving them to Germans for all any pro-domestic person should care)

actually, most is from the U.S.....second is Canadian.....

Actually Japan's econonmy is not so good. From what I have read the USA's economy is growing, China/Korea is exploding, and they are well...not.

Basicly China and Korea are putting a hurt on them like they did to us years ago. Japan's economy is really dependent on the US being able to buy their products. If GM/Ford gets in serious trouble a US recession would not be far behind. This would be VERY BAD for Japan's economy plus let the cheaper Chinese/Korean products gain even more ground on them.

Japanese compaines have bailed/helped each other out in a "us vs them" type of mentality for years. I see this as more along those lines than anything else. This is desperation not bragging IMO.

Can you say, oooopppppssss!!!!!
I don't think that comment should have been made in public. Probably Toyota's exec shooting from the hip just like Lutz has done plenty of times.


Seriously though, if Japan does end up putting GM/Ford behind the 8 ball of bankrupcty, I doubt Congress will just stand by and let GM and Ford be run out of business. Think of how many jobs this country would lose. They'd end up putting tariffs on Japanese cars and bailing out GM/Ford.

Wow, what a writer this guy has...

I would bet that Toyota couldn't care less about GM's financial troubles. They're just seeing their cars sell like hot cakes so they're increasing the margin that individual cars sell for. Why not? By coming out publicly and saying they're doing this to help an American car company will only win them over more buyers.