Toyota to Overtake GM as Top Carmaker

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An article in the Saturday, November 19, 2005 Wall Street Journal projects that Toyota may overtake General Motors as the highest selling carmaker in 2006.
While Toyota (Toyota, Lexus, Scion) may not sell more than GM (Chevrolet, Pontiac, GMC, Buick, Cadillac, Hummer, Saturn, Saab) in the United States, it may sell more worldwide. Toyota is concentrating much of its sales expansion in North America where it is pulling sales from General Motors and Ford. GM is bolstering production capacity in China and South America where it sees room for growth where Toyota is not yet strong.
The Wall Street Journal article is one of many recent media reports confirming the results of VehicleVoice research and forecasts by AutoPacific. VehicleVoice research shows a continuing deterioration in General Motors’ (and Ford and Chrysler traditional brands) market share in the United States under the concentrated onslaught of the Japanese Big Three. AutoPacific’s forecast of United States sales shows Toyota, Honda and Nissan increasing market share by adding new assembly capacity and models.


Are Americans Abandoning Traditional Big Three?
General Motors and Ford are having to resort to more and more expensive incentive programs to keep vehicles rolling off their sales lots. Both GM and Ford are under tremendous pressure from Wall Street to improve their financial performance while they are saddled with un-competitive UAW contracts, huge legacy costs from health care and pensions, and media negativism.
GM and Ford have both stated that they must revamp their operations through reductions in production capacity, reductions in hourly and salaried workers, streamlining of internal processes and reducing the number of suppliers. Announcements of the details should be reported early in 2006.
All of these actions are being watched and reported closely by the media. It seems that business and auto writers have a herd mentality when reporting about GM and Ford. They have found all the negatives to report on, but few of the positives. This media feeding frenzy does nothing to help the future success of GM and Ford and leads to negative public perceptions, hence buyers are more hesitant to buy American cars and trucks. In the face of media scrutiny, buying Japanese or European cars may seem like a safer bet to car buyers in America.

This article has 3 comments

  1. david barrett 11/21/2005, 11:06 am:

    I heard that Toyota may change their pricing model to “assist” GM as it struggles through its latest round of challenges. How would this work – and why would Toyota take such a position?

  2. karxprt 11/21/2005, 1:34 pm:

    Based on GM’s announcement today that they will shrink by 30,000 workers and shutter eight plants plus drop shifts at others, it seems like this Wall Street Journal article is on target. Question is whether Toyota is moving too fast?
    GM’s objective is to improve profitability by increasing plant utilization at the expense of market share. Good move. You don’t have to be biggest to be best.

  3. GB 12/09/2005, 4:11 pm:

    I think they need to consider the negative backlash if they are seen as crushing our once-beloved American companies. So of course they want to see sales, productivity, profits increase but they also need to be seen favorably when they do surpass GM. Similar to Microsoft seen as the Evil Giant I guess.

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