Toyota: U.S. Market Hasn't Hit the Bottom Yet

Robert Farago
by Robert Farago
toyota u s market hasnt hit the bottom yet

Why the Hell would it? The U.S. “housing crisis” is far from over, money’s too tight to mention, getting credit’s a bitch and the consumer shift to more fuel efficient vehicles has left millions of SUV owners backwards/underwater on their loans. Amongst other things. Anyway, the idea that U.S. new vehicles sales have “bottomed-out” is a combination of wishful thinking and boilerplate bullshit, largely perpetuated by the weasel-word factory known as General Motors’ PR. (Show me ONE MONTH of sales gains and THEN we’ll talk.) As I wrote in my latest General Motors Death Watch, Automotive News [AN, sub] fell for– indeed perpetuated– this spinmeistery hook, line and sinker. In an attempt to atone for their shameless capitulation to Mark LaNeve’s mob, AN has followed-up with a micro-story on Toyota’s take on the American car market’s doldrums [via Reuters]. And here it is: “Despite signs of steadier U.S. auto sales in August, it remains uncertain whether industrywide sales in the largest vehicle market have hit bottom, Toyota Motor Corp. Vice Chairman Kazuo Okamoto said today. ‘It’s hard to say whether the U.S. market has hit bottom,’ Okamoto told reporters. Okamoto, speaking through a translator, also said that despite the recent decline in oil prices, Toyota, the world’s largest automaker, was still assuming oil prices would be higher over the long term as the basis for its product planning.”

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4 of 23 comments
  • Capeplates Capeplates on Sep 07, 2008

    AS Gordon Brown says "Recession - what recession!"

  • Pch101 Pch101 on Sep 07, 2008
    All I am asking for is a stable base by which to discuss. I apologize if the world isn't as simple as some might like it to be. But it isn't. Some would like to believe that 2% growth is 2% growth, no matter where it comes from. I'm pointing out how overly simplistic that is. As a parallel example in the car world, on this website, there is much discussion of fleet sales vs. retail sales. Savvy readers have come to realize that selling large volumes of cars as cheap rentals is not as good as selling them at retail. Some people, particularly those who wish to be in denial, adamantly refuse to accept this. But the smart readers have figured out that all sales are not created equal. A 2% GDP growth rate that comes from inflation and the escalating price of basic staple goods, escalating health care costs, and governments stuck with the cost of a war and unemployment benefits is not as good as growth that comes from consumers improving their lifestyles, businesses investing in the economy and government creating infrastructure that we can use in the future. When the "growth" comes from the wrong places, it's a negative, not a positive. If these inflated costs of rising utility costs, escalating food costs, etc. are removed from the equation, then we had little or no growth during 2008. You can either accept that for what it is or pretend it isn't happening and deny it.

  • RogerB34 RogerB34 on Sep 07, 2008

    Don't get wrapped around the axle comparing 2008 to 1929. If it happens, the effects will be several years down the road. By end of 1933 GDP had declined 50 percent from 1929 and 25 percent of the workforce unemployed. Unemployment did not go below 14 percent rest of the decade. Average GDP 1930 - 2007 is 3.4 percent per year. One standard deviation is 5.1 percent meaning wild swings are normal economic performance. GDP is reported as inflation adjusted unless stated as Nominal GDP which is not adjusted.

  • NetGenHoon NetGenHoon on Sep 08, 2008

    Just a thought, maybe this combines the two theories. Maybe the economy has reached a point of 'saturation'. The majority of people have enough houses, enough cars, etc. Perpetual growth is not possible in durable goods markets, because after a while everyone's got one, and when times aren't booming, not everyone has a reason to get a new one....