Even Toyota builds bad cars nobody wants.
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Joined: Aug 1998
Posts: 511
From: Mill Creek, WA
Even Toyota builds bad cars nobody wants.
I know this is hard to believe especially after watching the big three raked over the coals in DC and having the very objective and informative media outlets in this country tell us just how bad American made cars are and how unpopular they are in the world, but if plummeting sales and operating losses are the key indicator of this ineptitude then it would seem based on this link that Toyota is just as unpopular. http://money.cnn.com/2008/12/22/news...yota/index.htm
Can someone please set me straight because i have been under the impression for years now that the Asian automotive builders build the BEST and MOST WANTED cars in the world as their sales success and a profitability would suggest. Did someone flip a switch and all of a sudden they build cars nobody wants either? I'm so confused. Here I thought it was only us moronic Americans that were seeing sales tumble. I wonder if the European automotive manufacturers are seeing sales drop also? I wonder if the tanking economy has anything to do with the automotive world? I think I will just file this article as a fluke or an early April Fool's joke. Surely only the United States builds terrible cars, GM in particular the global sales leader up until last year. That's a lot of sales for cars that nobody wants.
BTW this post is laced with sarcasm in case it didn't translate. I just thought some might like to see published evidence of just how far reaching the economic problems are globally since even Toyota, yes Toyota are struggling for sales despite their immense cash reserves.
Can someone please set me straight because i have been under the impression for years now that the Asian automotive builders build the BEST and MOST WANTED cars in the world as their sales success and a profitability would suggest. Did someone flip a switch and all of a sudden they build cars nobody wants either? I'm so confused. Here I thought it was only us moronic Americans that were seeing sales tumble. I wonder if the European automotive manufacturers are seeing sales drop also? I wonder if the tanking economy has anything to do with the automotive world? I think I will just file this article as a fluke or an early April Fool's joke. Surely only the United States builds terrible cars, GM in particular the global sales leader up until last year. That's a lot of sales for cars that nobody wants.
BTW this post is laced with sarcasm in case it didn't translate. I just thought some might like to see published evidence of just how far reaching the economic problems are globally since even Toyota, yes Toyota are struggling for sales despite their immense cash reserves.
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Joined: Dec 2008
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I think everyone’s sales are dismal right now and I haven’t read anything that seems to think it will get any better until at least the end of 2009.
Good post.
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Joined: Aug 2001
Posts: 2,400
From: Michigan's left coast
I really don't get this idea of rejoicing around a competitor's misfortune. It's an odd emotional response that would not play well in any board room that I know of.
Let's look at the facts:
1) The global economy is in a recession . This means that auto sales will likely drop 4-5% worldwide and 25-30% in markets where there was little fiscal responsibility (i.e. the US). Household purchasing power has seen little improvement in the last decade, and so we've got a lot of "unwinding" to do before equilibrium is reached.
Sales will likely fall much further if indeed any significant region falls into a lengthy depression.
2) Virtually every auto company will be negatively affected by this. Considering how few auto companies there are that make "reasonable" profit margins (I'd call this in the neighborhood of 10-12% and above), most auto companies will be in the red next year as minor decreases in demand will wipe out the razor-slim profit margins.
Until enough supply (manufacturing capacity) is destroyed, the auto industry as a whole will likely not be sufficiently profitable. This means that either all of the companies need to get a lot smaller, or some of them need to go away entirely.
This is a situation that's been over a decade in the making, and would have eventually played out even without a recession. It's simply not possible to run a trillion-dollar industry without making profits - at some point, those that are financing such huge sums of money will find other places to put their money and obtain better returns.
3) Some companies are well-equipped to handle this. Toyota has tens of billions in the bank, the company's cash flow is quite good, and it doesn't rely on a lot of credit just to keep the lights on. A loss of a couple billion probably won't sink the company. A company like Honda might be in more trouble due to its smaller size; we'll see what happens in the coming year.
There are also a handful of suppliers that will survive, and then thrive as their competitors fall by the wayside. Expect someone like Bosch to show some short-term financial pain, and then ring the cash register as it outlives companies like Delphi.
4) Some companies would have gone under in the next 6-12 months even without a recession. These companies probably saw the writing on the wall, but expected to have more time to put some things in order before wandering on over to the local federal courthouse to file for bankruptcy protection, or seek out a merger with a healthier competitor. These are the ones that are currently begging favors from their governments to keep the lights on a bit longer. No, GM and Chrysler are not the only ones on this list.
There are several suppliers that are in the same boat - they had maybe another year or so left under ideal circumstances, and a lot less time when the financial markets melted down. Hell, there were some suppliers that went C11 and C7 even during the sales boom of the last several years.
The bottom line here is that the auto industry needs to get smaller, and will end up with fewer players as a result. Don't look towards Toyota's short-term losses with delight, as this doesn't mean anything good for the hometown crowd. Toyota will make it out of this alive, I'd bank on that; I'm not so sure I'd put money on too many other auto companies around the world.
Let's look at the facts:
1) The global economy is in a recession . This means that auto sales will likely drop 4-5% worldwide and 25-30% in markets where there was little fiscal responsibility (i.e. the US). Household purchasing power has seen little improvement in the last decade, and so we've got a lot of "unwinding" to do before equilibrium is reached.
Sales will likely fall much further if indeed any significant region falls into a lengthy depression.
2) Virtually every auto company will be negatively affected by this. Considering how few auto companies there are that make "reasonable" profit margins (I'd call this in the neighborhood of 10-12% and above), most auto companies will be in the red next year as minor decreases in demand will wipe out the razor-slim profit margins.
Until enough supply (manufacturing capacity) is destroyed, the auto industry as a whole will likely not be sufficiently profitable. This means that either all of the companies need to get a lot smaller, or some of them need to go away entirely.
This is a situation that's been over a decade in the making, and would have eventually played out even without a recession. It's simply not possible to run a trillion-dollar industry without making profits - at some point, those that are financing such huge sums of money will find other places to put their money and obtain better returns.
3) Some companies are well-equipped to handle this. Toyota has tens of billions in the bank, the company's cash flow is quite good, and it doesn't rely on a lot of credit just to keep the lights on. A loss of a couple billion probably won't sink the company. A company like Honda might be in more trouble due to its smaller size; we'll see what happens in the coming year.
There are also a handful of suppliers that will survive, and then thrive as their competitors fall by the wayside. Expect someone like Bosch to show some short-term financial pain, and then ring the cash register as it outlives companies like Delphi.
4) Some companies would have gone under in the next 6-12 months even without a recession. These companies probably saw the writing on the wall, but expected to have more time to put some things in order before wandering on over to the local federal courthouse to file for bankruptcy protection, or seek out a merger with a healthier competitor. These are the ones that are currently begging favors from their governments to keep the lights on a bit longer. No, GM and Chrysler are not the only ones on this list.
There are several suppliers that are in the same boat - they had maybe another year or so left under ideal circumstances, and a lot less time when the financial markets melted down. Hell, there were some suppliers that went C11 and C7 even during the sales boom of the last several years.
The bottom line here is that the auto industry needs to get smaller, and will end up with fewer players as a result. Don't look towards Toyota's short-term losses with delight, as this doesn't mean anything good for the hometown crowd. Toyota will make it out of this alive, I'd bank on that; I'm not so sure I'd put money on too many other auto companies around the world.
Thread Starter
Registered User
Joined: Aug 1998
Posts: 511
From: Mill Creek, WA
I really don't get this idea of rejoicing around a competitor's misfortune. It's an odd emotional response that would not play well in any board room that I know of.
Let's look at the facts:
1) The global economy is in a recession . This means that auto sales will likely drop 4-5% worldwide and 25-30% in markets where there was little fiscal responsibility (i.e. the US). Household purchasing power has seen little improvement in the last decade, and so we've got a lot of "unwinding" to do before equilibrium is reached.
Sales will likely fall much further if indeed any significant region falls into a lengthy depression.
2) Virtually every auto company will be negatively affected by this. Considering how few auto companies there are that make "reasonable" profit margins (I'd call this in the neighborhood of 10-12% and above), most auto companies will be in the red next year as minor decreases in demand will wipe out the razor-slim profit margins.
Until enough supply (manufacturing capacity) is destroyed, the auto industry as a whole will likely not be sufficiently profitable. This means that either all of the companies need to get a lot smaller, or some of them need to go away entirely.
This is a situation that's been over a decade in the making, and would have eventually played out even without a recession. It's simply not possible to run a trillion-dollar industry without making profits - at some point, those that are financing such huge sums of money will find other places to put their money and obtain better returns.
3) Some companies are well-equipped to handle this. Toyota has tens of billions in the bank, the company's cash flow is quite good, and it doesn't rely on a lot of credit just to keep the lights on. A loss of a couple billion probably won't sink the company. A company like Honda might be in more trouble due to its smaller size; we'll see what happens in the coming year.
There are also a handful of suppliers that will survive, and then thrive as their competitors fall by the wayside. Expect someone like Bosch to show some short-term financial pain, and then ring the cash register as it outlives companies like Delphi.
4) Some companies would have gone under in the next 6-12 months even without a recession. These companies probably saw the writing on the wall, but expected to have more time to put some things in order before wandering on over to the local federal courthouse to file for bankruptcy protection, or seek out a merger with a healthier competitor. These are the ones that are currently begging favors from their governments to keep the lights on a bit longer. No, GM and Chrysler are not the only ones on this list.
There are several suppliers that are in the same boat - they had maybe another year or so left under ideal circumstances, and a lot less time when the financial markets melted down. Hell, there were some suppliers that went C11 and C7 even during the sales boom of the last several years.
The bottom line here is that the auto industry needs to get smaller, and will end up with fewer players as a result. Don't look towards Toyota's short-term losses with delight, as this doesn't mean anything good for the hometown crowd. Toyota will make it out of this alive, I'd bank on that; I'm not so sure I'd put money on too many other auto companies around the world.
Let's look at the facts:
1) The global economy is in a recession . This means that auto sales will likely drop 4-5% worldwide and 25-30% in markets where there was little fiscal responsibility (i.e. the US). Household purchasing power has seen little improvement in the last decade, and so we've got a lot of "unwinding" to do before equilibrium is reached.
Sales will likely fall much further if indeed any significant region falls into a lengthy depression.
2) Virtually every auto company will be negatively affected by this. Considering how few auto companies there are that make "reasonable" profit margins (I'd call this in the neighborhood of 10-12% and above), most auto companies will be in the red next year as minor decreases in demand will wipe out the razor-slim profit margins.
Until enough supply (manufacturing capacity) is destroyed, the auto industry as a whole will likely not be sufficiently profitable. This means that either all of the companies need to get a lot smaller, or some of them need to go away entirely.
This is a situation that's been over a decade in the making, and would have eventually played out even without a recession. It's simply not possible to run a trillion-dollar industry without making profits - at some point, those that are financing such huge sums of money will find other places to put their money and obtain better returns.
3) Some companies are well-equipped to handle this. Toyota has tens of billions in the bank, the company's cash flow is quite good, and it doesn't rely on a lot of credit just to keep the lights on. A loss of a couple billion probably won't sink the company. A company like Honda might be in more trouble due to its smaller size; we'll see what happens in the coming year.
There are also a handful of suppliers that will survive, and then thrive as their competitors fall by the wayside. Expect someone like Bosch to show some short-term financial pain, and then ring the cash register as it outlives companies like Delphi.
4) Some companies would have gone under in the next 6-12 months even without a recession. These companies probably saw the writing on the wall, but expected to have more time to put some things in order before wandering on over to the local federal courthouse to file for bankruptcy protection, or seek out a merger with a healthier competitor. These are the ones that are currently begging favors from their governments to keep the lights on a bit longer. No, GM and Chrysler are not the only ones on this list.
There are several suppliers that are in the same boat - they had maybe another year or so left under ideal circumstances, and a lot less time when the financial markets melted down. Hell, there were some suppliers that went C11 and C7 even during the sales boom of the last several years.
The bottom line here is that the auto industry needs to get smaller, and will end up with fewer players as a result. Don't look towards Toyota's short-term losses with delight, as this doesn't mean anything good for the hometown crowd. Toyota will make it out of this alive, I'd bank on that; I'm not so sure I'd put money on too many other auto companies around the world.
As far as the board room comment what is said in a boardroom and what is felt can be and often are two separate coexisting thoughts.
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Joined: Aug 2001
Posts: 2,400
From: Michigan's left coast
Eric I agree with every point you made seriously no sarcasm. My only issue is with your first two sentences. While I admit I have no sympathy for Toyota what I was trying to demonstrate is that despite the constant media drumming of negativity towards the big 3 Toyota itself is also fallible since this crisis is as much economic as it is poor leadership at the respective auto manufacturer's HQ's. GM, Ford, and Chrysler while guilty of many bad decisions and poor self inflicted circumstances are not entirely in the position they are in today as a result of their own actions but also those of the lending market, and subsequent housing markets resulting their own collapse.
Had the economy continued on some sort of stable path, GM and Chrysler would likely have gone Tango Uniform sometime next summer. Hell, just look at their financial performance when autos were flying off the showroom floors as proof that they were still bleeding money even when times were good.
Honda pulling out of racing and scrapping internal programs and Toyota's impending year end negative balance sheet proves that no matter how well your company is run economics are impacting EVERYONE negatively not just the home teams.
As far as the board room comment what is said in a boardroom and what is felt can be and often are two separate coexisting thoughts.
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Joined: Jun 2006
Posts: 439
From: upstate New York
Not so much 'taking delight in a competitor's trouble' as pointing out the fallacy of Sen. Shelby's comments that the reason American manufacturers are struggling is because they build shoddy cars- Everybody is struggling in the current economic climate.
I agree that there is a finite market- the whole national fleet turns over, what maybe 10% per year? Probably not even that high- But who will be slicing up that pie is an important topic- and where whichever company that does this has their headquarters located in may be of interest, too-
I agree that there is a finite market- the whole national fleet turns over, what maybe 10% per year? Probably not even that high- But who will be slicing up that pie is an important topic- and where whichever company that does this has their headquarters located in may be of interest, too-
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Joined: Aug 2001
Posts: 2,400
From: Michigan's left coast
Had Toyota been turning in losses of tens of billions in the past 3-4 years, I'd feel a bit different about their position vis-à-vis that of GM.
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Joined: Aug 1998
Posts: 511
From: Mill Creek, WA
But there is a difference between Toyota's position, and that of the Big 2.8. Toyota will see some short-term pain from the current economic environment. GM and Chrysler may cease to exist, and frankly, that Day of Reckoning wasn't brought on by the financial crisis - it just got moved up on the calendar by 6-8 months.
Had the economy continued on some sort of stable path, GM and Chrysler would likely have gone Tango Uniform sometime next summer. Hell, just look at their financial performance when autos were flying off the showroom floors as proof that they were still bleeding money even when times were good.
Yes, this highlights the point - but there is still a world of difference between the pain suffered by Toyota, and that suffered by any number of weaker competitors. I suspect the next several months will drive this point home.
As I assume you may be aware, there is a substantial difference in thoughts and spoken words depending on the circumstances. The poor performance of a competitor due to a soft global environment is highly unlikely to bring any enjoyment.
Had the economy continued on some sort of stable path, GM and Chrysler would likely have gone Tango Uniform sometime next summer. Hell, just look at their financial performance when autos were flying off the showroom floors as proof that they were still bleeding money even when times were good.
Yes, this highlights the point - but there is still a world of difference between the pain suffered by Toyota, and that suffered by any number of weaker competitors. I suspect the next several months will drive this point home.
As I assume you may be aware, there is a substantial difference in thoughts and spoken words depending on the circumstances. The poor performance of a competitor due to a soft global environment is highly unlikely to bring any enjoyment.
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Joined: Jun 2000
Posts: 3,463
From: SoCal
There is no joy for any more losses in this economy. But that being said the media and our own Congress would have us believe that the Domestic brands are still building Cimarron’s and Pintos. So to show that the new auto king, beloved Toyota is struggling helps to further paint a hypocritical picture that is the current opinion of the industry.
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Joined: Aug 2003
Posts: 2,688
From: Middle of Kansas
