By on January 2, 2014

TOYOTA/

Bloomberg is reporting that Akio Toyoda, president of Toyota Motor Corp. and scion of its founding family said that a slowdown in emerging markets and uncertainty over demand in both China and the Japanese home market makes 2014 “unpredictable”.

While the weaker yen increased earnings for Japanese exporters, those profits are being offset by slowing demand in India, Thailand, Brazil, and Russia. Japanese automakers also continue to face a potential repeat of Chinese consumers rejecting their products, as happened last year as tensions between those countries’ governments increased over who owns a group of Islands under dispute.

“It may be impossible” to shield against tensions between the two countries, Toyoda had told reporters earlier in December. “But we will work to minimize the impact.”

Slowing sales in emerging markets caused Honda Motor Co. to miss analysts’ forecasts for its first-half earnings this year. Nissan Motor Co., which is looking to make Mexico a hub for exports, reduced projected full-year earnings by 15 percent to reflect slower than anticipated sales in the developing world.

Toyota’s own operating profits were down in Asia, excepting Japan, in the third quarter, as Thailand ended government incentives for first-time car purchases. Akio Toyoda was pessimistic about Japan as well because of that country’s planned increase in the national sales tax rate from 5% to 8%. The Toyota president said, on behalf of JAMA, that automakers would like to see a stable yen since production cannot be shifted around the world as quickly as currency values change. The Japanese currency is currently at a five year low against the American dollar.

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12 Comments on “Akio Toyoda Sees Emerging Markets’ Growth Slowing, Uncertainties in China, Japan...”


  • avatar
    Big Al from Oz

    Global growth was 2.9% in 2013 and is projected to be 3.6% in 2014.

    Maybe some of the commentary from ‘Western’ business should be we are unable to capitalise on global growth.

    So, who is profiting the most out of this increased growth. Africa?

    The Chinese are gaining a foothold, for years the ‘West’ neglected Africa and almost had a ‘Colonial’ attitude of stripping natural resources out of the continent, with an exception of Sth Africa.

    The US growth should rise to more normal levels with little flow on in developing nations and even the Eurozone.

    This is another indicator that OECD economies have to restructure if we want to profit more from global activity and not only worry about ourselves.

    As Toyoda is stating, we aren’t competitive enough, not that actual growth is slowing.

    • 0 avatar
      Onus

      The BRICS have slowed considerably for various reasons the last few years. Competitiveness is not a factor unless its with the BRICs being competitive which they don’t have.

      Chinese wages are on the RISE and growth is much slower than in past years.

      Sounds to me they hit the end of their fantastic growth and now will grow slower.

      Russia has hit a growth ceiling as well likely due to corrupt government that scares business away.

      I do agree on the Africa bit. The Chinese are pouring in money. Why aren’t we?

      • 0 avatar
        Big Al from Oz

        @Onus
        Yes, Africa is a loss for many in the West, some Euro (mainly French) are investing in Northern Africa. Resource companies with government support have supported corrupt African regimes for short term gain for decades.

        But, my point is the IMF is predicting an increase in the global outlook.

        Lots of the cash that the US has provided for it’s quantitative easing will come back to the US. I’m waiting to see what kind of inflationary impact this will eventually have.

        It will be interesting to see how the quantitative easing has affected not only the US, but the globe in the longer term. The effects will linger for years to come, and maybe not always in a positive way. Remember, for every upside there is a downside.

        The BRICS will go into a stagnated mode. India, is ridden with red tape, unproductive regulation, barriers, etc this is caused by government and the influential rich who are fighting not to have India liberalise it’s economy.

        China, is now going to pay the price of ‘subsidisation’. China isn’t what it appears. The provinces and cities in
        China have been spending up big with cheap subsidised loans and have accrued significant debt. Chinese banks aren’t too healthy.

        China’s ruling elite are just as polarised as the Nationalist Tea Party and the Socialist Dems in the US. The provinces have a large degree of independence from the Central ruling committee. There is friction.

        The Brazilians will have to change their model and reduce protectionism, subsidisation, red tape, etc, similar to the Indians. This will improve productivity. But wet economic policy gives short term benefit with increased longer term risk.

        The BRICS have had a sniff of wealth and the general populace of these countries are aware. Government will change the way they manage themselves and be a little more cautious about the decisions they make.

        Companies like Toyota are at the top in our OECD (Western) led globe. How much longer will the OECD lead? This will put more pressure on our competitiveness like Toyota is finding out.

        How much higher can Toyota go? Remember, many still look at the globe as an OECD lead world.

        What Chinese or Indian vehicle manufacturer has the potential to rise above what we have?

        After the GFC is over and done with we will see a different world.

        Influence and affluence will change dramatically over the next couple of decades.

        • 0 avatar
          Lorenzo

          I believe most of the quantitative easing has consisted of the Federal Reserve printing new money to buy Treasuries to finance our massive deficit. That money isn’t leaving the country, but going into the Fed’s balance sheet, and it has reduced foreign purchases of our debt, keeping bond prices high, while zero interest has kept yields low.

          All that extra money being created should result in horrendous inflation down the road, but hasn’t yet exploded. America has a level of stability that makes it a safe haven for foreign wealth, and that keeps the dollar stable. The “Great Recession” of 2008-? has chastened the American workforce and made it competitive.

          The oil and gas potential via shale is being watched closely by energy-intensive industry and foreign producers. Cheap energy could re-industrialize America while making it energy-independent, and that could soak up a lot of the new money that’s been floated, keeping the dollar stable. The outlook for the rest of the world isn’t as promising.

          • 0 avatar
            Big Al from Oz

            @Lorenzo
            A lot of money from the US in it’s quest of quantitative easing has found it’s way into foreign markets and provided cheap cash.

            As the US reduce this, the money is drying up externally of the US.

            I agree with the inflationary impact further down the track. This will again erode the standard of living in the US.

            Making it more competitive.

            As for the energy boom in the US, it might not provide the amount of boost that is be discussed by some. I’m not as hopeful.

            As for the rest of the world. I think Australia will fare okay, not as good as we have been going.

            What impacted Australia was mining infrastructure investment not actual mining. Mining is going to increase and Australia will again have a surplus. Less investment into infrastructure equals billions less in imports.

            With the easing of the quantitative easing our dollar will depreciate, which is very good. I do think our dollar will range from US 80c to the mid 80s. This is a decrease of over 15% of the AUD’s highs.

            The increase in the AUD has forced our industry and business to restructure and streamline. The depreciation of the AUD will be a benefit for us. The effect might take time to flow on.

            My comment was based more on the future of businesses like Toyota.

            We will see many companies from developing economies rise, like Tata.

  • avatar
    Type57SC

    So, you’re saying that a japanese exec is cautionary in his forecast and vows to struggle to overcome all odds.

    Dog bites man at 11:00.

  • avatar
    lowsodium

    I can see Toyota losing market share here in the states pretty badly in the next couple years. Lots of competition in small cars, and another lackluster Tundra is going to hurt.

    • 0 avatar
      84Cressida

      Tundra sales are up and Toyota is still trying to find a way for more capacity to build more. Yeah, lackluster.

      As for small cars, the new Corolla is doing well, well enough that there are hardly any deals to be had:

      The completely redesigned 2014 Toyota Corolla has a much more striking design, updated interior and improved fuel economy. All-new cars tend to sell at less of a discount, and the Corolla is no exception. It’s selling at just 0.47 percent below sticker price

      http://autos.aol.com/gallery/worst-new-car-deals/?icid=maing-grid10|htmlws-main-nb|dl3|sec3_lnk3%26pLid%3D422876#!slide=1264963&kgal_back

  • avatar
    Joss

    Akio Toyoda Sees Emerging Markets’ Growth Slowing, Uncertainties in China, Japan…”

    No Carlos here… The prez is covering his ass with the board and wants to stay a while yet.

  • avatar
    romismak

    Well i don´t think so, Toyota will have fine 2014, not great year but they will sell more cars than this year, in 2013 the numbers should be about 9.95m, in 2014 i expect 10.25m something like this, they will sell more in NA – which will grow again, also in Latin America, in Africa, Middle east they are biggest brand so will grow with market, in Europe their cars are popular with new hybrids and EU green technology and so on and rebounding EU market in 2014 they can´t possibly sell less… YoY numbers i mean. Yes Japan will be tough, but Japan should have been tough alredy in 2013 and look what happened market almos so big like in 2012. But o.k 2014 will be tough with new tax, but the problem here for Toyota is their market share is just to big in Japan Toyota grup is just so huge that if Japan goes down they go down even quicker.

    Well emerging markets – China will grow, Toyota too, don´t see problems here unless some big anti-japan riots will happen again.

    Brazil – In 2013 Toyota was great, with new Etios and everything they got market share from Fiat-VW and others.

    Russia – market down, but Toyota doing o.k, 2014 shoudl Russia grow i believe, Toyota too

    India – tough market.o.k they lost here but India in long term is going to be huge market

    Thailand – after incredible 2012 with those incentives everybody predictd market to be down, and still it is doing better than predicted.

    I see good 2014 for Toyota, sales down in Japan, + in all other parts of the world, because all other parts of the world should grow, NA, Latin America, Europe, Africa, Middle east, ASEAN, China, – India we will see.

    • 0 avatar
      Viquitor

      Don’t know where do you get your info, but the Etios is a failure in Brazil.

      Mr. Toyoda should be honest enough to blame not just Brazilian economics and whatnots for the weakening demand. The choice to bring the Etios instead of the Yaris was a stupid, stupid one. Nobody wants the damn thing.

      Ask Hyundai about Brazil and the Koreans will tell you a whole other story.

  • avatar
    Big Al from Oz

    Here is a very good study document by the OECD on vehicle production and capacity to produce.

    It will give a lot of people who aren’t aware of what is going on outside of their Country’s borders.

    You can see the problem OECD economies are confronting and where the future in vehicles currently stand, globally.

    http://www.oecd.org/eco/Policy%20note_automobile.pdf


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