The Fit is made in Japan, and there was an article on this site a few weeks back where even the head of Honda admitted that the company makes very little money off it.

Um, considering that Honda said so, and you have said that you trust these companies to be always truthful, there’s your proof.

And please note that it is a well-known fact that profit margins are lower on small cars than on bigger cars. So the head of Honda wasn’t saying anything that is “counterfactual” to those of us who understand how this industry operates.

This is in contrast to the profitability of the Prius, which certainly could be profitable (I never denied that it could be – I said that I would like to see independent proof), but, given its new and very advanced drivetrain and other technology, will logically cost more to make than comparably sized cars, but still must be sold at a price most people can afford.

M1EK: Toyota makes money through volume. It doesn’t make much money on each Yaris and Corolla, and whether it is actually making money from the Prius is a very good question – at least for those of us with a healthy dose of skepticism regarding information contained in press releases.

Um, again, that doesn’t prove anything, and certainly not the point you are trying to make. They make money through their smaller cars on volume, so they make healthy profits on small cars, but just not if you look at it on a per-vehicle basis. Given that they sell fewer small cars than medium-size and large cars, not to mention trucks, SUVs, minivans, crossovers and luxury cars, it’s pretty obvious that they depend on said larger vehicles for a hefty share of those profits.

Yes, you have.

The Fit is made in Japan, and there was an article on this site a few weeks back where even the head of Honda admitted that the company makes very little money off it.

and

Toyota makes money through volume. It doesn’t make much money on each Yaris and Corolla, and whether it is actually making money from the Prius is a very good question – at least for those of us with a healthy dose of skepticism regarding information contained in press releases.

In my post of September 29, 2008 at 4:57 p.m. I furthered fleshed out the sales figures.

Whatever point you are trying to make by focusing an early post is irrelevant; I’ve proven incorrect your contention that Toyota and Honda sell “mostly” small cars in later posts.

You made that statement; it has been proven incorrect by unbiased sources (in spite of the amusing and desperate attempts to classify the Camry and Accord as “small” cars because…they are smaller than a Suburban or Silverado; I guess under that standard, a Cadillac DTS is a small car, too).

M1EK: As for large vehicles vs. large cars – again, there’s much more reason to believe Toyota when they say they make money on the Prius than there is to believe GM if they say they make money on their midsize cars – given the financial results we have access to.

Really…given that GM has been examined closely by independent organizations and even an independent auditing firm hired by the UAW, and Toyota is a Japanese-based company subject to completey different disclosure requirements.

I’m still waiting for that independent source of information from you on this matter, but I’m beginning to feel as though I’m waiting for Godot.

M1EK: You can’t explain the COMPARATIVE results of Honda/Toyota vs. GM/Ford/Chrysler given their relative product mixes without a healthy profit on small cars for H/T.

I have explained that there is a difference in cost structures, union agreements (or lack thereof) and legacy costs, which the companies and the UAW have attempted to address, but you chose to ignore these critical factors.

M1EK: It’s chicken feed compared to a $9,000 difference in profit per vehicle.

Which, of course, is irrelevant.

M1EK: Likewise, I’d like to hear you claim to Honda and Toyota that they don’t make a healthy profit on small cars.

Considering that I’ve never made this claim, you’ll be waiting for a long time. The simple fact is that the profit margins on smaller cars are less than the profit margins on larger vehicles, which is why Honda and Toyota (and others) have moved aggressively into larger cars, luxury vehicles, pickups, crossovers and SUVs within the last decade. Considering that these two companies are very efficient, and masters at platform sharing, and their new entries have mostly been successful, it would stand to reason that their forays into these more profitable market segments are responsible for a large share of their profits.

Nice try

I know that you know that the Civic is a small car by most peoples’ definition; but I also know that when you first opened your mouth, you tried to pretend that the relevant number was “Fit versus Accord”. It tells a lot.

As for large vehicles vs. large cars – again, there’s much more reason to believe Toyota when they say they make money on the Prius than there is to believe GM if they say they make money on their midsize cars – given the financial results we have access to.

GM didn’t make money on cars the last decade or two because their cars suck – not because you can’t make a lot of money on cars, even small cars. You can’t explain the COMPARATIVE results of Honda/Toyota vs. GM/Ford/Chrysler given their relative product mixes without a healthy profit on small cars for H/T.

I would like you to tell a manager at Honda or Toyota (let alone Ford or GM) that a $1,000 difference in profit per vehicle is chicken feed. Don’t complain when they laugh you right out of the room…

It’s chicken feed compared to a $9,000 difference in profit per vehicle.

Likewise, I’d like to hear you claim to Honda and Toyota that they don’t make a healthy profit on small cars.

I compared the number of Fits sold to Accords, but then in a later post I compared the number of small cars sold by both companies to the larger vehicles sold by both companies.

I moved beyond the original point to further prove incorrect your contention that these companies mostly sell small cars.

They don’t; this has been proven with sales figures; get over it.

M1EK: The fundamental fact is that despite selling a lot of small cars, Honda and Toyota make a LOT more money than do Detroit (than did Detroit even when times were better). This makes your claim the extraordinary one – because H/T would have to be making incredibly larger profits on their SUVs to keep up with Detroit otherwise.?

Yes, it’s completely out of the question that companies with a lower cost structure that are able to charge similar or higher prices for larger cars, minivans, SUVs and pickups would be making more than Detroit per vehicle, and this would have a significant contribution to their bottom line, even at a lower volume.

M1EK: The characterization of your point is accurate: you pretend that you can’t make much money selling small cars. Obviously, Toyota and Honda make a lot of money selling small cars. You’re wrong.

I never said that; here is what I posted:

4. I’ve PROVEN that they sell more larger vehicles than smaller vehicles, contrary to your original, erroneous assertion. (Which left you whining that I had the gall to include Scion sales with Toyota’s small car sales totals, which actually BOOSTED the number of small car sales)

5. It’s therefore logical to assume that a big, fat percentage of their profits come from these larger vehicles, and they wouldn’t be nearly as profitable if they were relying soley on Fit, Civic, Yaris, Corolla and Scion sales.

MIEK: And this statement shows quite succinctly how your goalposts keep jumping around:

So which is it? Vehicles or cars? The Camry is a smaller-than-average ‘vehicle’ (when SUVs/pickups are included), but a midsize ‘car’. Which way do you want to take this?

For the 20th time, the Camry and Accord are not small cars; they are not small vehicles. Period, end of story. They are medium-size vehicles, whether you are comparing them to a Silverado or an Avalon.

I made this very clear in my post on September 29, 2008 at 4:57 p.m., when I listed the sales of not only small and large cars, but also pickups trucks, SUVs, crossovers and minivans, and then made SEVERAL comparisons, one of which was sales of small cars to all larger vehicles.

M1EK: By the way, the difference between $1000 and $2000 per vehicle is chicken feed compared to the $10000 they might have made on an SUV during the bad old days.

First, you have no proof that $1,000 is the actual per-vehicle profit for small cars, and second, I would like you to tell a manager at Honda or Toyota (let alone Ford or GM) that a $1,000 difference in profit per vehicle is chicken feed.

M1EK: By the way, here’s a quote from YOU in which you attempted to compare ’small’ versus ‘large’ cars, implying that the Fit was the only small car they had:

That was one example, and considering I made several more posts that further explained my position and made more in-depth comparisons, it hardly constitutes my final word on this subject.

If you scroll up through this thread, you will see that I made several additional postings that moved beyond that initial comparison, and were far more in-depth and have, if anything, further demolished your original contention.

The Accord and Camry are NOT small cars by any stretch of imagination. They are medium-size cars both inside and out. Those two cars are where both companies make a large part of their profits. Honda sells about 85,000 Fits in the U.S., as compared to over 400,000 Accords. Quite a big difference. It also subsidizes U.S. Fit sales by selling the car in other markets were small cars command more of a premium.

The characterization of your point is accurate: you pretend that you can’t make much money selling small cars. Obviously, Toyota and Honda make a lot of money selling small cars. You’re wrong.

And this statement shows quite succinctly how your goalposts keep jumping around:

“Toyota and Honda sell MORE larger vehicles than they do small cars.”

So which is it? Vehicles or cars? The Camry is a smaller-than-average ‘vehicle’ (when SUVs/pickups are included), but a midsize ‘car’. Which way do you want to take this?

By the way, the difference between $1000 and $2000 per vehicle is chicken feed compared to the $10000 they might have made on an SUV during the bad old days.

Wrong. I specifically classified the Civic as a small car, along with the Fit.

The only “pretending” that is occurring here is being done by you, as you are now pretending that I said that the Fit is the only small car sold by Honda.

Instead of accusing me of making “counterfactual” arguments, how about getting your own posts straight, and not putting words in another poster’s mouths?

Here is my original post for your convenience:

The Accord and Accord Hybrid sold 291,053 units, while the Civic, Civic Hybrid and Fit combined moved 346,518 in that same time frame.

In other words, one large, relatively expensive model sold almost as much as two smaller models combined. Honda is profitable, but the big profits are coming from those Accords it sold this year, which are not small cars by any measure, nor are they cheap. (emphasis added)

Who cares what GM considers the Accord (or Camry) to be. What matters is its actual size. It is not a small car; it is a medium-size car aimed at the family sedan market. I should know – I drive a 2003 EX sedan, and the new-generation model is bigger yet.

Repeat that 10 times before posting again.

M1EK: The excuses GM and others have made is NOT that they couldn’t make money selling their smallEST cars – it’s that they couldn’t make money on cars, period, and we KNOW they consider the Accord/Camry to be ’small’ in relation to their overall vehicle mix.

Again, irrelevant. And if GM can’t make money on ANY cars, then you need to explain why it recently introduced a very competitive CTS and Malibu, and is prepared to introduce an all-new LaCrosse replacement, all of which cost a pretty penny to develop.

And have you missed the news stories explaining how GM has been revamping its factories for improved efficiency, working with the UAW to implement more cost-effective work rules, and is using global platforms in the U.S. to reduce costs? Think that maybe those moves have had a positive effect on the profitability of lower-margin vehicles? So maybe there was a reason(s) GM wasn’t able to make money on many car lines?

M1EK: Despite that, even when you just consider the Civics and Corollas, it is crystal clear that Honda and Toyota make money on those vehicles -

I never said otherwise, so you can put that strawman in the corn field where he belongs.

M1EK: they don’t sell nearly ENOUGH bigger vehicles to make their overall profit so high otherwise.

Please reread the sales figures I posted, then remember that profit margins are higher on larger vehicles than on smaller vehicles, so that you gain at least some semblance of an understanding of the autombile business.

M1EK: Now, if Honda and Toyota were making only a little bit of money, you might have a case.

That would be true if they only sold Fits and Yarises.

M1EK: One might stretch and conclude that they made so much money on their SUVs (even though they sold far less of those than did Detroit) that their small cars might only be marginally profitable. But for them to make the money they do, with the product mix they have, they simply HAVE to be making a LOT of money on the combination of (Fit+Civic) or (Yaris+Corolla+Prius). Nothing else remotely makes sense.

Except that they sell LOTS of SUVs, medium-size cars, pickups and minivans. And, one presumes, at a profit.

After all, profit margins have been higher on those vehicles than on smaller cars. Reread my original post – Toyota and Honda sell MORE larger vehicles than they do small cars.

M1EK: You guys are making the extraordinary claims here. Again, it’s you that needs to supply the extraordinary proof.

Nonsense (and I’ve yet to see independent proof that the Prius makes money for Toyota). You’re the one making the extraordinary claim – that these companies are reaping most of their profits from small, low-margin cars. Sorry, this runs counter to the history of this business.

M1EK: And don’t back up to “I never said they didn’t make money on small cars”. You know what you were trying to imply – that the small cars were practically loss leaders; that is not remotely the case. If they make $1000/car on Civics, that’s a lot of money, even if they also make $2000/car on Accords.

You can’t even read what I posted, and apparently don’t realize that the difference between $2,000 and $1,000 is a HUGE difference in the automobile industry, where costs and margins are broken down to the level of cents, so please don’t tell me what I meant.

What I meant is there in plain English. Let me help you by breaking down what I’ve said:

1. I never said that Honda and Toyota lost money on the small cars.

2. I never said that they don’t make some money on them.

3. I said that the profit margins on smaller cars are not as high as the profit margins on bigger ones (and trucks and SUVs).

4. I’ve PROVEN that they sell more larger vehicles than smaller vehicles, contrary to your original, erroneous assertion. (Which left you whining that I had the gall to include Scion sales with Toyota’s small car sales totals, which actually BOOSTED the number of small car sales, and could have strengthened your case. LOL!)

5. It’s therefore logical to assume that a big, fat percentage of their profits come from these larger vehicles, and they wouldn’t be nearly as profitable if they were relying soley on Fit, Civic, Yaris, Corolla and Scion sales.

If you have trouble understanding these points – or want to continue mischaracterizing them – there is nothing that I or anyone else can do to help you.

Despite that, even when you just consider the Civics and Corollas, it is crystal clear that Honda and Toyota make money on those vehicles – they don’t sell nearly ENOUGH bigger vehicles to make their overall profit so high otherwise.

Now, if Honda and Toyota were making only a little bit of money, you might have a case. One might stretch and conclude that they made so much money on their SUVs (even though they sold far less of those than did Detroit) that their small cars might only be marginally profitable. But for them to make the money they do, with the product mix they have, they simply HAVE to be making a LOT of money on the combination of (Fit+Civic) or (Yaris+Corolla+Prius). Nothing else remotely makes sense.

You guys are making the extraordinary claims here. Again, it’s you that needs to supply the extraordinary proof.

And don’t back up to “I never said they didn’t make money on small cars”. You know what you were trying to imply – that the small cars were practically loss leaders; that is not remotely the case. If they make $1000/car on Civics, that’s a lot of money, even if they also make $2000/car on Accords.

1. Honda and Toyota’s vehicle mix is tilted MUCH more towards cars (and small cars) than is Detroit’s. Not a small difference; a large difference.

What the figures show is that Toyota and Honda sell more larger cars, trucks and SUVs than small cars. And anyone who has studied this industry knows it that profit margins have historically been higher for large vehicles than for small cars.

M1EK: 2. Honda and Toyota make a lot more money than does Detroit. Not a small difference; a large difference.

Yes, which has as much to do with success in international markets, greater production efficiency and a better reputation as anything else. Not to mention sales of trucks, minivans, SUVs, luxury cars and family sedans…

M1EK: Yet you expect us to believe it’s impossible to make good money selling small cars?

You need to take that one up with Honda and Toyota management, as they are the ones that have upsized the Accord and Camry and invaded the pickup and SUV markets. Or do the Tundra, Pilot and Sequoia exist only in my imagination?

Maybe, just maybe, they were motivated to invade these markets by the idea of…making greater profits?

M1EK: And don’t try the gambit of saying you really meant subcompacts – we know that for Detroit, anything less than an SUV is a ’small’ car -?

Apparently, since you can’t win on the facts, you are now engaging in mind-reading, as you now KNOW what Detroit considers to be a small car, and this somehow makes your case.

That isn’t just “counterfactual,” it’s just plain silly.

You should join the Psychic Hotline; you can charge good money for that kind of mumbo-jumbo passed off as mind-reading.

A little education here – what Detroit thinks regarding vehicle size is irrelevant. If GM calls the Malibu a minicar, under your “logic,” we must accept that designation.

What matters is the actual size of the vehicle. The Accord and Camry are not small cars by any measure (neither is the Avalon, the Acura lineup, or the Lexus lineup apart from the IS).

M1EK: but even if you move the goalposts like that, you still have to deal with the fact that they sell so many Civics and Corollas, and make money on every one of them, without resorting to Korea to do it.

Uh, no, you are the one moving the goalposts by attempting to have the Accord and Camry classified as “small cars,” which makes about as much sense as classifying Rosie O’Donnell as a swimsuit model. They are large cars. Period. As I said, visit your local Toyota and Honda dealer to actually look at these cars so that you know what you are talking about.

And, yes, Honda and Toyota sell lots of Civics and Corollas, and make money from their sales, but please quote the post where I denied this. What is undeniable is that Toyota and Honda sell more larger vehicles than small cars, and anyone with an inkling of how this industry operates would realize that those vehicles are responsible for a hefty share of their profits.

As I said before, when you have an independent source that verifies this, let us all know. In the meantime, you obviously don’t, so I’d suggest that you stop trying to dodge the issue and do something called “research” to find an independent source that verifies your assertion.

M1EK: And this paragraph shows that you’re interested in nothing more than shilling:

To equate each of the niche-market Scions to major models is dishonest at its core. You have to know this, and yet you did it anyways.

No, it shows that I am interested in accuracy, and make sure that the facts are on my side before making an assertion. (You might learn to do this.)

We aren’t talking about whether models are niche models or mainstream models.

So stop trying to change the subject.

The question was whether Toyota and Honda sales mostly consist of small cars, and to measure this, we must include the sales of ALL small cars.

You said that Toyota sells mostly small cars. I counted Scions because they are small cars, and, if anything, help BOOST your case, as they raise the total sales of Toyota’s small cars.

(And if I had not counted Scion sales, one guess as to which poster would be squawking about the omission.)

M1EK: Far more honest to point out that the top-selling vehicles in the country include both Corollas and Camries and both Civics and Accords. And, again, looking at the product mix of the Big Three, Camries/Accords aren’t that ‘big’ either.

Far more honest would be to admit that you are again trying to change the subject, as the rank of those vehicles on the sales chart was not the original question.

How these cars rank in sales in irrelevant. The question is whether most of Toyota and Honda sales come from small cars, as you asserted, and they clearly don’t.

And the Camry and Accord are NOT small cars. They are anything but small, and if you doubt this, please visit your local Toyota and Honda dealer before posting so that you know what you are talking about.

The fact that GM, Ford and Chryrsler sell lots of trucks and SUVs doesn’t make the Camry and Accord “small” any more than it makes a Cadillac CTS “small.”

M1EK: The conclusion is that you can and do make money selling cars, even ’small’ cars, or Toyota and Honda wouldn’t be making the profits they’re pulling down. You’re arguing an apparent counterfactual here – it’s YOUR obligation to provide extraordinary proof, not mine.

Nice try, but no. First, as we’ve seen, contrary to your assertion, MOST of Toyota and Honda sales do not come from small cars. You can re-read my post that gives you the exact sales figures. If you have trouble with reading comprehension or basic math, please let me know, so that I can help you.

Second, it is a FACT that smaller cars have a lower profit margin than larger vehicles, so if anyone is making a “counterfactual” assertion, it is you, and you’ve done nothing to back up your assertion.

Do Honda and Toyota make money on small cars? Yes, but I never denied that. What is undeniable is that large vehicles make more money per vehicle than smaller ones (anyone with knowledge of how the industry operates knows this), that Toyota and Honda sell lots of larger vehicles, and they sell more larger vehicles, as a whole, than small cars. So, one can logically conclude that Toyota and Honda rake in a very large share of profits thanks to the sale of larger vehicles.

Here’s things we know to be true:

1. Honda and Toyota’s vehicle mix is tilted MUCH more towards cars (and small cars) than is Detroit’s. Not a small difference; a large difference.

2. Honda and Toyota make a lot more money than does Detroit. Not a small difference; a large difference.

Yet you expect us to believe it’s impossible to make good money selling small cars? And don’t try the gambit of saying you really meant subcompacts – we know that for Detroit, anything less than an SUV is a ’small’ car – but even if you move the goalposts like that, you still have to deal with the fact that they sell so many Civics and Corollas, and make money on every one of them, without resorting to Korea to do it.

Your writing is fantastic. I laughed so hard I forgot about the wall street bailout/failout.

GM sold large trucks because that is where they could make a profit. Toyota had to sell small cars in Japan, and has a larger base of small cars. Toyota lusted after the profits of large trucks and built the Tundra.

Lower cost producers will put the hammer to the Japanese, just as has happened to the domestic producers. Profits are always low or non-existent on entry level cars, this is acknowledged throughout the industry, only an idiot would challenge this. Could GM have sold a small car and made a profit in the 90’s on it? no. Now with higher gas prices – maybe.

Loading a car that is physically small to a high price means no profit was available at the low end. Look at how few base Tacomas are manufactured and sold, the goal for Toyota is to sell loaded trucks.
The large increase in fuel prices has favored the Japanese sales in the US, however serious competition to them is on the horizon. This competition is unavoidable in the system of free trade. As any economist will explain, ultimately the low cost producer wins. The low cost producer will never be a developed nation which pays a decent wage. Already Hyundai Elantra is winning head on competition with the Corolla on car reviews. Designing to a price point, the low cost producer can always add more content.

No, it doesn’t. It amounts to “Toyota said so, and we haven’t caught them lying enough times in the past not to trust them, and what they’re saying isn’t wildly contradicted by other observed facts”.

And this paragraph shows that you’re interested in nothing more than shilling:

Yaris, Prius and Corolla and Scion (I counted four Scions) sales through August totalled 550,478. Meanwhile, sales of the Camry and Avalon in the same period were 356,981. So it takes SEVEN small cars to outsell two large cars.

To equate each of the niche-market Scions to major models is dishonest at its core. You have to know this, and yet you did it anyways.

Far more honest to point out that the top-selling vehicles in the country include both Corollas and Camries and both Civics and Accords. And, again, looking at the product mix of the Big Three, Camries/Accords aren’t that ‘big’ either.

The conclusion is that you can and do make money selling cars, even ’small’ cars, or Toyota and Honda wouldn’t be making the profits they’re pulling down. You’re arguing an apparent counterfactual here – it’s YOUR obligation to provide extraordinary proof, not mine.

That amounts to “because I said so,” and isn’t enough.

I’m giving Toyota’s statements as much credence as you give GM’s statements that it can’t make money on small cars in the U.S.

M1EK: As for cherry-picking, Honda sells more Fits+Civics than they do Accords. You chose the brand new subcompact model which is still undergoing production adjustments. Talk about a red herring.

Except that you specifically said that Honda makes “mostly small cars.”

Let’s look at Honda’s sales figures through August 2008:

The Accord and Accord Hybrid sold 291,053 units, while the Civic, Civic Hybrid and Fit combined moved 346,518 in that same time frame.

In other words, one large, relatively expensive model sold almost as much as two smaller models combined. Honda is profitable, but the big profits are coming from those Accords it sold this year, which are not small cars by any measure, nor are they cheap.

And then let’s add the 201,355 Odysseys, Pilots and Ridgelines it also sold through August 2008, which are high-priced vehicles (Odysseys and Pilots regularly go for well over $30,000), and are anything but small. Plus, another 142,096 CR-Vs which, while not large, are hardly inexpensive.

So, WITHOUT Acura, Honda sold 346,518 small cars, versus 634,504 of everything else. (Acura would raise the total of SUVs and larger cars.) Obviously, most of Honda’s sales are NOT small cars. Unless you have a different defintion of “most.” If so, please share it with us.

And that’s not even considering the different profit margins earned by different vehicles. Honda makes more money selling one Accord or Pilot than it does selling one Fit. Still want to say that Honda makes most of its money in the U.S. from the sale of small cars?

So looking at volume without considering profit margins on each vehicle doesn’t give us the entire picture, but to do so would undoubtedly puncture yet another hole in your contention.

And that’s just for Honda. We aren’t even looking at Acura, which doesn’t sell small cars anymore.

M1EK: Same with Toyota – they sell more Yaris+Corolla than they do Camry. And when it suits you guys, you’re more than happy to call the Prius a ’small’ car too, so throw that one in too.

So, let’s look at Toyota sales, too.

Yaris, Prius and Corolla and Scion (I counted four Scions) sales through August totalled 550,478. Meanwhile, sales of the Camry and Avalon in the same period were 356,981. So it takes SEVEN small cars to outsell two large cars.

Do you really think that Toyota is making most of its North American profits off of small cars, especially given that smaller cars have a lower profit margin than larger ones?

Trucks and SUVs add another 468,169 to the total. While the RAV-4 may be considered fairly small, it’s hardly cheap, and that truck and SUV figure includes the Sienna, FJ Cruiser, 4Runner, Highlander, Sequoia, Land Cruiser, Tacoma and Tundra, which are neither small nor cheap – all of which were bringing higher profit margins than the Corolla and Yaris. Of course, this will change as sales of Toyota’s SUVs and pickups decline. But then, I’m willing to bet that Toyota’s profits will decline, too, as its vehicle mix becomes less profitable.

So, Toyota sold 550,478 small cars, versus 825,150 of everything else. And, remember, this doesn’t include Lexus sales. Lexus, like Acura, would raise the total of SUVs and larger cars.

That hardly sounds as though “most” of Toyota’s sales come from small cars, although, again, if you have a different defintion of “most,” please share it with us.

But wait – Toyota sells more different truck and SUV models than it does small cars (nine versus seven). So shouldn’t that lower profitability of its trucks? Not necessarily, because there is more room for differentiation among higher-price vehicles (because of the greater profit margin).

That is why, for instance, GM for years badge-engineered its subcompacts and compacts (the NOVA cars of the 1970s being the prime example), while still maintaining distinctions among its bigger, more profitable vehicles (the Eldorado, Toronado and Riviera, for example).

M1EK: Oh, another fact: Both make a lot of money. Both sell mostly cars, and mostly small cars at that. If you’re going to argue the counterfactual premise that somehow they don’t make a lot of money on ’small’ cars, you need to do a lot better than you’ve been doing so far.

I just did. The figures are available to anyone. You might want to consult them before making the above contention, and accusing me of not backing up my arguments.

And what small cars does GM have to sell me today? The awful Cobalt and the Aveo, which DOES come from Korea.

So if you’re really afraid of offshoring, you should be avoiding GM, right?

We were told not to worry about losing our manufacturing base – there was always the next new “great thing” like the dot com industry. Of course, the dot coms died, and the next great thing never happened.

This is exactly what happened in ship building. Maybe the benefit of having low cost ships is worth it. Maybe the same for cars. If only it did not create a massive trade deficit which kills our currency at the same time. Do we have a trade deficit in cars and car parts with Japan? Then they have not really moved all that much mfg here have they.

Seems the Europeans have it right. Allow some competition, but retain most of your manufacturing, and keep your currency strong, and keep the trade deficit low.

Cars which are sold here, need to be made here. Putting an assembly plant here is not being made here. Made here means like Opel is to Germany. The Japanese will move their plants out -once Detroit dies.

Trying to compete against the lowest cost country in the world, means we have to also accept their standard of living. We are well on our way down this path. US blue collar wages peaked in 1973. Where will it end?

The fact is that both make a ton of money making ’small’ vehicles both in Japan and in the US. Not one single car sold here by either company is made in Korea.

geeber, the assumption ought to be that somebody is telling the truth, all else being equal, and nobody has brought forth one bit of evidence that Toyota isn’t telling the truth – they’ve been consistent in their story and it matches all the available data.

As for cherry-picking, Honda sells more Fits+Civics than they do Accords. You chose the brand new subcompact model which is still undergoing production adjustments. Talk about a red herring. Same with Toyota – they sell more Yaris+Corolla than they do Camry. And when it suits you guys, you’re more than happy to call the Prius a ’small’ car too, so throw that one in too.

Oh, another fact: Both make a lot of money. Both sell mostly cars, and mostly small cars at that. If you’re going to argue the counterfactual premise that somehow they don’t make a lot of money on ’small’ cars, you need to do a lot better than you’ve been doing so far.

Not good enough. Please show me an independent source that confirms (not merely repeats) what Toyota said. I don’t take Toyota’s statements at face value any more than I take GM’s statements at face value. I’m keeping an open mind about this, but your post is not enough proof.

M1EK: You guys are arguing fundamentally counterfactual premises here. Both are extremely profitable companies; and both make mostly small cars. At least, small compared to the SUVs that the US car companies tried so hard to get us to buy for so long against our best interests.

Saying that the Japanese make primarily small cars because they are “small compared to SUVs” made by the Americans (and the Japanese, and the Koreans, and the Germans) is skewing the playing field to get the result you want.

That’s like saying that most people are beautiful and fit – because they look better than Danny DeVito and Sandra Bernhard. Well…who doesn’t???

The Accord and Camry are NOT small cars by any stretch of imagination. They are medium-size cars both inside and out. Those two cars are where both companies make a large part of their profits. Honda sells about 85,000 Fits in the U.S., as compared to over 400,000 Accords. Quite a big difference. It also subsidizes U.S. Fit sales by selling the car in other markets were small cars command more of a premium.

And both companies sell a large percentage of their production in overseas markets, which has an entirely different size-and-price correlation than the U.S. market did (and still does, despite the recent runup in gas prices).

And the Prius is an upscale car. However, even here, I believe Toyota loses money on every one they sell.

Yet another counterfactual statement. Also known as a lie in some circles. Toyota has said flat-out that they make money on the Prius and have for a very long time.

And if you think Toyota makes most of their corporate profit on Lexus sales, you are numerically challenged.

You guys are arguing fundamentally counterfactual premises here. Both are extremely profitable companies; and both make mostly small cars. At least, small compared to the SUVs that the US car companies tried so hard to get us to buy for so long against our best interests.

Boatloads of it.

The Accord is no longer a small car, and most of the ones I see at the dealership START at $24,400+, with prices all the way up to $29,000+ for the EX V-6L sedan models with navigation system, leather and satellite radio.

I wouldn’t use the Accord as proof that a company can make profits on small cars, as it is no longer even remotely a small car, nor is it even especially cheap. It has become your father’s Oldsmobile (Cutlass Supreme).

The Fit is made in Japan, and there was an article on this site a few weeks back where even the head of Honda admitted that the company makes very little money off it.

Most Civics start at $19,000, and go up to $22,000. They aren’t cheap, and pretty much have cornered the market for pricey smaller cars.

Toyota makes money through volume. It doesn’t make much money on each Yaris and Corolla, and whether it is actually making money from the Prius is a very good question – at least for those of us with a healthy dose of skepticism regarding information contained in press releases.

Note that VW must import a fair number of its small cars from Mexico, and it still loses money in the U.S.

Dutchchris: With the trade unions sidetracked jobs in the car industry have degenerated to the hire/fire kind making the big 2.8 basically automotive variants of Macdonalds.

The Jobs Bank still exists for the Big 3, which means that UAW workers don’t necessarily lose their jobs when there is a layoff. They sit around, receive almost their entire pay, and wait to be called back to work. Union jobs have hardly been “sidetracked,” and unions members can’t be fired without a very good reason.

UAW jobs are not “hire/fire” type of jobs at this point.

Chapter 11, obviously, could change this, but for now, there are still pleny to UAW workers at GM, Ford and Chrysler, and they are protected by the national contract from losing their jobs or suffering pay cuts.

Plus, the wages made by UAW workers are MUCH higher than those paid to McDonald’s workers. There is absolutely no comparison.