Toyota Motor Corporation (Toyota, Daihatsu, and Hino) is expected to land with a thud on place 3 in the global ranking of automakers in 2011. I came to this conclusion after several telephone calls and a flurry of emails. In the end, Toyota spokesman Paul Nolasco gave it to me (as requested) in writing:
“When it comes to the current CALENDAR YEAR, on a consolidated basis (TMC, Daihatsu and Hino combined), TMC is now (as of June 10) forecasting production of 6.8 million units.”
The avalanche of telephone calls and emails was triggered by an article in The Nikkei [sub] today, that had left the opposite impression. We’ll get to that article in a minute. First, the table:
|Rank ’10||2010 Actual||2011 Proj||Proj Rank ’11|
|Company projection||TTAC projection|
Unless a meteor will drop on Wolfsburg, or the Lake St. Clair Monster will eat what’s left of Detroit, GM will finish the year 2011 as #1, Volkswagen will take #2, and Toyota will land in the #3 position. This projection is based on a simple method: We took last year’s results and increased them by the growth rate of the first quarter of 2011. Except in the case of Toyota, where we took the bombshell projection of issued by the company today.
The admittedly crude method should be quite reliable as far as a projected ranking goes. All three contenders are separated by more than a million units. There is ample room for the inevitable error.
We could have refined the projection by using actual data through May. We get the data monthly from Toyota and Volkswagen. GM however did not respond to our repeated requests for monthly global data. GM publishes quarterly data, so this is what we have to use. We can revisit the matter in July when we have half year results for all companies.
With a little bad luck on the part of Toyota and a lot of good luck on the part of Hyundai, there is a chance that Hyundai could take the #3 spot. In our projection, Hyundai and Toyota are 354,000 units apart. The Hyundai number is a bit shaky. Hyundai reports sales, whereas we want production. Hyundai does no report consolidated numbers, but includes Kia when the OICA numbers are compiled. To replicate this, we had to consolidate Hyundai’s and Kia’s numbers, which is another possible source of errors.
Now let’s get to the article in The Nikkei I had mentioned. It says: “Toyota now projects global output in fiscal 2011 to surpass that of the previous year.” Now how can Toyota drop like a rock while The Nikkei actually sees Toyota climbing? It can. But only in a way that is not clear to the casual observer.
First of all, The Nikkei is comparing fiscal years. This is very common in Japan, but not so in the West. The fiscal goes from April 1 to March 31 the following year. But that can’t possibly explain it. Toyota as in Toyota Motor Corporation produced 8,241,675 units in the fiscal year ending March 31, 2011. It should be humanly impossible to exceed that number three months after Toyota had produced 6.8 million in a calender year. Even if we consider the fact that TMC plans to accelerate production a lot in the first quarter of 2012.
Another sentence in Paul Nolasco’s email clears that up – if you pay close attention:
“When it comes to the current FISCAL YEAR, in terms of the Toyota and Lexus brands (regardless of what company on the face of the earth makes the vehicles), TMC is now (as of June 10) forecasting production of 7.39 million units, SURPASSING the previous fiscal year’s 7.34 million units.”
The 7.34 million are correct. They are the FY 2011 results for the Toyota and Lexus brands only, and do not include Daihatsu und Hino. However, and The Nikkei should know that, Toyota Motor Corporation is measured by the consolidated output across all brands and subsidiaries. That number was 8,241,675 for the previous fiscal.
While we are at it, a little global ranking arcana.
The official scorekeeper of the global ranking of automakers is OICA. Look at OICA as the sanctioning body of the automotive production race. If your company is not on the OICA list, then your production number is worth as much as a land speed record that has not been certified by the FIA. As in: Forget about it.
The ranking is by automotive group. What counts is production, not sales. All motor vehicles according to the OICA definition are counted. Basically, it is all passenger and commercial vehicles, but no motorbikes, trikes, or railroad engines.
Currently, Toyota is in the #1 position, followed by GM and Volkswagen. This is on the basis of 2009 production numbers. OICA compiles the list in summer of the following year. The 2009 list was compiled on July 23, 201o. Some time in late July of this year, Toyota will be crowned again as king of the automotive hill, based on 2010 numbers. We don’t expect the rankings to differ much from the list we compiled in January. The actual numbers however will differ slightly from what is in the annual reports. They always do.
Toyota can wear the #1 crown until late July 2012 when OICA compiles their 2011 list. Except in this case, Toyota won’t.
“The production race has always been a race we did not want to compete in,” said Paul Nolasco today after we had the numbers squared away. I laughed and answered “yes, that’s what they all say.”
However, when Toyota took #1 from GM in 2008, Akio Toyoda said that the title was not won on the strength of Toyota, but on the sudden weakness of GM. Internally, Toyota employees were warned that the #1 leader is the target of all that follow. We all know what happened then.