Toyota to Drive Past GM in 2007
With a global production target of 9.42 million vehicles, Toyota Motors is eyeing for the number one slot in the world’s automobile sector and is all set to surpass General Motors with the dawn of next year.
The Japanese multinational corporation has used fuel efficient cars and affordable prices as bait to hook more and more customers in the present year, whereas, General Motors and Ford Motor Co., has suffered gravely due to inflation in fuel prices.
General Motors and Ford Motor Co. have been battling falling market shares, closing of factories, and layout of employees.
General Motors are expecting to produce 9.2 million vehicles this year, while Toyota has estimated to produce and sell 9.04 million vehicles. It also projected an increase of 4% in 2007.
Seeing their market shares wrinkled by Asian automakers, General Motors has not revealed its production targets for next year, but the company has decided to scale down its production.
Toyota has projected to increase its overseas output by 8% and will produce 4.27 million vehicles. In the domestic market, the company has estimated a 1% increase, with 5.15 million vehicles.
The vehicles manufactured by General Motor have been perceived as gas-guzzlers, but Detroit-based GM snubs away these perceptions, calling it “unfair” and “inaccurate”.
Toyota, on the other hand, is soaring high and benefiting in the market with the production of its fuel efficient cars. It has driven home huge profits with its best-sellers Camry and Corolla. It has also carved out a lauded reputation due to the hybrids, which use a fine-tuned technology of switching between a gasoline engine and electric motor to save gas at a time when oil prices are mounting.
Prius has become the top selling hybrid car in America. Toyota now has three hybrid vehicles in its lineup (Prius, Highlander, & Camry). The popular minivan Toyota Sienna is supposed to join the hybrid lineup by 2010, and by 2030 Toyota plans to have its entire lineup of cars, trucks, and SUVs to have a Hybrid Synergy Drive option.
Toyota surpassed Ford in 2003 to take the number two slot and is now aiming for the number one, and seeing the present condition of the Detroit automakers, the Japanese “big three”, including Toyota, Nissan and Honda, are carving their ways to fish huge profits.
Analysts however say that the one risk which Toyota faces is too much growth. The company has recently been plagued with recalls, as they have indulged in standardization of parts to cut costs and produce and sell vehicles at a faster pace.
The main challenge that the company faces is to provide maximum satisfaction to its customers and at the same time, step up its production. Toyota has repeatedly promised to improve quality and not to standardize products.
Toyota has also introduced new methods of production which empowers assembly line workers and trims inventory. The methods have been praised by experts but the challenge is to transport production to new places.
Toyota is opening new plants in Russia, Thailand and China next year to keep up with demand.
Toyota is also eyeing the lucrative U.S market which has been long dominated by the American automakers. In 2007, Toyota’s Tundra pickup trucks will enter the U.S markets.
The company has also used its assets to purchase stakes in General Motor’s previous Japanese alliances- Fuji Heavy Industries, the maker of Subaru cars, and truckmaker Isuzu. Toyota will be even using Fuji's Indiana plant to make Camries starting in spring 2007.
General Motor had a 20% stake in Fuji, but due to its restructuring policies, it had to sell off the entire stake last year. Toyota bought an 8.7% stake in Fuji for about $315 million to become the top shareholder.
Isuzu Motors Ltd. is famous for its diesel technology that Toyota is eager to gain. Last month, Toyota bought 5.9% stake in the company, half a year after General Motors sold its 7.9% stake in Isuzu.
