“If this is the lot of top-ranked carmakers, pity Detroit”.
If mighty Toyota is drowning in red ink, what price the rest of the industry?
Toyota, the Japanese money making machine that had made a profit in every year since 1938, lost $4.6 billion in the year ended March 2009, and expects to almost double that in the current financial year, to $8.5 billion.
Wall Street Journal columnist James Simms said either Toyota is being too conservative, or maybe, just maybe, it is losing its grip.
Standard & Poors cut its credit rating on Toyota, saying it expected the deterioration in global auto markets will continue to pressure the company. Falling sales and an appreciating yen wiped out Toyota’s profits, S&P said.
Sales down one million
Meanwhile, Toyota said it will sell about 1 million fewer vehicles in the current financial year ending in March 2010. It sold 1.3 million less cars the previous year.
Even Toyota can’t buck the market.
“Toyota is a leader among global auto manufacturers with a formidable degree of competiveness and particular strengths in terms of its robust product line-ups, technological leadership. Geographic diversity, cost efficiency, and financial strength, recovery in the global auto markets is key for Toyota to fully demonstrate these strengths,” S&P said.
There are some whispers of criticism out there.
Automotive News columnist Edward Lapham, possibly with whiff of schadenfreude, said Toyota has “contracted the dreaded disease known as GM Bloating Syndrome”.
Lapham said one of the reasons for Toyota’s trouble is its push to outsell GM and become the world’s biggest car maker. It has done that, according to Lapham, but has shed some of the previous Toyota efficiency principles on the way.
According to the FT’s Lex column, this doesn’t augur well for weaker car manufacturers.
“If this is the lot of top-ranked carmakers, pity Detroit,” Lex said.
Neil Winton – May 12, 2009