Toyota Motor Corp looks all set to rule the car market. After clinching the title of the world’s biggest automaker, it has predicted further vigorous growth in 2008. Toyota had become the world’s top selling automaker for the first quarter, surpassing General Motors during January – March ’07. The sales forecast for 2007 of Japan’s Toyota was 9.36 million while its American rival GM estimated its global sales, in the same year, at 9.2 million. President Watanabe has upped the target to selling 9.85 million vehicles the next year, from a previous target of 9.8 million.
The auto giant is expecting to lift up its sales in the car markets of emerging nations such as China, Russia and Brazil. Toyota, along with other car makers, has been experiencing express sales in such markets and is anticipating combined sales of approximately 900,000 vehicles in ’08; this is a rise of almost 40%. A sales target of one million has been made for China after 2010.
Interestingly, there is an expectation of a weaker market in US and Japan. The housing slump and the sub-prime loans problems are the reasons being attributed for expecting the same level as last year in United States.
With a product line-up including the Camry and Prius hybrid cars, Toyota has attracted more customers in emerging and mature markets alike, all the while increasing profits through cost cuts and economies of scale. Furthermore, Toyota has earned a reputation for producing quality and fuel efficient vehicles. On the other hand, GM has cut production as high fuel prices turned people away from its light trucks and sports utility vehicles.
Looking at the revenues and income of both ToMoCo and GM, it is seen that although GM generates more revenue, Toyota has become far more profitable in the recent years. Toyota’s revenue for the year 2004 was $163.6 Billion while its Income was $11B. For GM, in the same year, Revenue was $193.5B and its Income was $3.7B. The statistics that I have put forth are slightly outdated but it has been noticed that the same trend has been continuing for the years after also.
However, there is no way GM has given up the fight, having held the #1 spot for 76 years, and still holding the record for most cars sold: 9.55 million in 1978. In 2006, General Motors sold 78 models over eight brands. Toyota sold 27 models over three brands. Although I must reveal that many experts feel that it is better to have the policy of Brand Focus which would ensure greater customer loyalty.
Now it only remains to be seen whether ToMoCo. will be able to honor its New Year resolution or not. As for now the message is clear and like a particular blog said “If it were poker, Toyota would have looked at GM, pushed all its chips into the pot and said, ‘You know what that means.”