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Automotive News & Views Toyota in decline in 2009?
3255 messages, Last post on Nov 10, 2009 at 2:02 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
...if we get an encore performance of last summer's gas prices, those excess '09 Pruises will sell like hotcakes.
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Toyota stockpiles parts as a precaution 'War room' monitors wobbly suppliers as bankruptcy fears rise April 27, 2009 - 12:01 am ET Toyota Motor Corp.'s North American auto plants are warehousing key parts to safeguard against supply chain interruptions caused by supplier failures. The company is ordering more parts than it needs in order to build reserves that would allow it to continue assembling vehicles in the event of an interruption. It is also looking for duplicate sources of some parts in cases where it feels particularly vulnerable, said Steve St. Angelo, senior vice president of Toyota Motor Engineering & Manufacturing North America Inc. and president of the company's large assembly complex in Georgetown, Ky. "Our biggest risk is our suppliers," St. Angelo said. "I can't ship a Camry or an Avalon if it's missing even one part." The moves violate Toyota's vaunted "just in time" production philosophy, which views warehousing as a symbol of muda, or waste and inefficiency. But Toyota now faces a worse problem than inefficiency: It fears that a bankruptcy by one of the Detroit 3 could set off a chain reaction of U.S. business failures that would shut down Toyota's own North American system. Since opening its first U.S. assembly plant in 1984, Toyota has become deeply rooted in the U.S. landscape. Although it continues to do business with a cadre of Japanese parts companies in which it holds a small ownership stake, Toyota has expanded its supplier network. More than half of Toyota's 500 U.S. parts suppliers also do business with General Motors, St. Angelo said. And some of them are struggling. On March 11, Jim Lentz, president of Toyota Motor Sales U.S.A., said Toyota has "real concerns" about 20 to 30 of its U.S. suppliers for fear that they could shut down Toyota production. http://www.autonews.com/article/20090427/ANA03/304279965/1176 (registration link) This of course is one of the scenarios that was mentioned as part of the scare tactics a few months ago when Chrysler and GM first threatened bankruptcy. If Toyota is able to stockpile some parts from the doomed suppliers, I wonder how long it will be able to continue production without an alternate supplier in place. Which also prompts the query: I wonder how long it takes to get an alternate supplier in place. |
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Replying to: lemko (Apr 27, 2009 6:03 am) You think so? And who will be buying them? Or better yet what banks will be making auto loans? The difference between this summer and last summer is the economy. Housing is still in the tank; unemployment is higher than it was last summer. Car sales are lower than last summer and people are simply not spending on new cars. Used car sales are up and the Koreans seem to be doing OK because they have less expensive entry level cars.. Hybrid sales have tanked in California at least, looking at the chart I posted you will see that at least in my home state the Prius sales are more than flat they are in the minus column. And with summer fast approaching what person will not wait till after the summer to get a better deal on a 2010 if it is a better car for less money? Here is a difference between last summer and this summer. Gas is lower than the “experts” predicted. We even heard people in these forums say, “we will never see $2.00 gas again last summer. They have plenty of left over hybrids sitting on the lots because gas came crashing down. People have simply started driving less and fuel usage in the US is down despite lower fuel prices. Not likely usage will increase this summer either. Even with production cuts demand isn’t going up. The economy is still in free fall and the bail outs to the banks have simply allowed big banks to buy smaller banks. Loans for homes or cars are at 25 percent of what they were last summer. New car sales are off by close 40 or 50 percent of even last summer. Used car sales seem to be doing better. So for the stock piled Prius’ or Prii to sell like hot cakes: 1. The economy has to recover. 2. The banks have to free up the money. 3. The housing market has to improve. 4. People have to feel secure about their jobs. 5. People have to start going back into the show rooms. 6. Unemployment has to improve. 7. Gas prices have to climb back to $4.00 or better. a. if that happens number 1, 4, and 6 are doubtful 8. It all has to happen before August or September and the 2010s are announced and prices published. If fuel prices go back up you might as well stick a fork in the economy because it will be done. Economic recovery will be set back by years. People will spend any extra money they have on food and housing before they get a new car. Even more so because of the job market. However if all the other positive steps take place I would care if it got like last summer. 
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Replying to: boaz47 (Apr 27, 2009 1:31 pm) But without buyers all makers will suffer across the board. Regarding the 09s there just aren't that many of them left...60 or 90 Days of Sales is my guess until the figures are published next week. Toyota doesn't do the D3 thing and continue production of the outgoing model as the new one debuts. It also doesn't overship at the end of a year or at the end of a model's life in order to puff up sales. Whatever 09s are on the ground now are it...finito. Toyota stopped making them several months ago. 8. It all has to happen before August or September and the 2010s are announced and prices published. ?? The first 10's are being loaded on vessels as we speak to arrive here mid to late May. The pricing was announced on the 21st, last week. |
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Replying to: kdhspyder (Apr 27, 2009 2:37 pm) well that pretty well kills any chance of 2009 hotcakes selling doesn't it? I don't expect we will see people taking out car loans in the 20 to 30K bracket as long as the economy is on the ropes. If GM goes under as well the unemployment rate we now have will look good compared to the jobs that will fold after that happens. I just have my doubts if gas will hit $4.00 in 09 if it even does in 10. And if it does who will pay more for a left over 09 than they would for a new 10? Nippon once commented that entry level cars will more than likely be the first ones to show signs of recovery and the 09 prius will not be entry level. Like I said if the economy does recover then $4.00 gas would seem like a small price to pay. But it doesn't look like the economy is going to recover and I doubt if Toyota Finance can carry the whole burden on their own. I wonder if they will offer a buy back program like Hyundai? Something the "experts" said a car manufacturer could never do and yet Hyundai is doing it. By the way have you seen some of the default rates the credit unions are faced with? It seems if people are willing to give up their car before they lose their home.
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Replying to: boaz47 (Apr 27, 2009 9:34 pm) In many ways the "we'll make your payments for 9 months if you lose your job" schemes are better from the consumer's point of view because you often need a car to get a job. Of course if it takes longer than 9 months to get a job, well the only thing you can say is that you are 9 months closer to not being upside down if you do eventually need to liquidate the car. |
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Replying to: boaz47 (Apr 27, 2009 9:34 pm) Well you can get a 40 mpg stick shift Yaris with all the bells and whistles except keyless and cruise for $14K....or you can spend $6-8K more and get a new Prius that makes 50 mpg. That's a big gap in price. I know my choice would be Yaris, and I think if we see any recovery at all this year, it will be in the smaller cheaper cars. Someone on the boards here just replaced his Echo with a Yaris this month. Prius was never in consideration, but then, we Echo owners are a fiercely loyal bunch! 
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Replying to: nippononly (Apr 28, 2009 5:58 am)  Still I would wait till I had no choice before I decided to get a new car in this economy.
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GM improves, Toyota slips as industry decline eases Ford, Honda and General Motors posted their smallest sales declines of the year in April, while Nissan and Toyota had their largest, as the industry improved from depressed levels of February and March. Drops of 33 percent at Ford Motor Co. and GM were in line with analysts' forecasts, as was American Honda's 25.3 percent slide. Nissan North America's 37.8 percent fall and Toyota Motor Sales U.S.A.'s 41.9 percent tumble were steeper than forecasts. ....Ford Motor outsold Toyota for the first time since March 2008. And in the "oh for shame!" category: The Honda Accord was the best-selling vehicle in the United States, unseating Ford's F-series pickup. Note there's no mention of the Camry there. For the first time, Toyota is now declining faster than the overall market for the YTD, and significantly faster than Honda is. That is during a period when Honda is continuing business as usual and Toyota is piling on the cash rebates. THAT can't be good! http://www.autonews.com/apps/pbcs.dll/article?AID=/20090501/ANA05/905019986/1078- (registration link)
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Replying to: nippononly (May 01, 2009 9:51 pm) Since they are not going to ship as much here and since they had the Tundra/Sequoia products shut down for 90+ days there simply are fewer vehicles being made available....thus few sales. In essence Toyota is shrinking itself intentionally.
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