Toyota Losing Its Halo?

October 27th, 2008 2:41 PM

We’ve counted ourselves among the many who laughed bitterly when Volkswagen first announced that it was campaigning to overtake Toyota as the top volume automaker in the world. Well, Automobilwoche Editor Guido Reinking has penned a column for Automotive News [sub] arguing that VW’s Mission: Improbable might just stand a chance. Surprisingly, the column is not a paean to German sachlichkeit in the nationalistic mold of most mainstream German auto journalism. Instead, Reinking makes a bold claim: Toyota, long the 800 pound gorilla of global automakers, may be losing its aura of invulnerability. First he points unconvincingly to Toyota’s 32 percent drop in US sales for the month of September, “worse even than the fall taken by sickly General Motors.” Sure Guido, but keep in mind that those are previous-year percentages, not apples-to-apples…

Reinking hits his stride when he argues that “contrary to popular perception, Toyota Motor’s dazzling growth during the past 10 years has been led by light trucks, not the fuel-efficient small cars and hybrids that are so associated with the Toyota brand.” he points out that Toyota’s “profit is projected to decline as much as 40 percent this fiscal year, which would yield a margin of barely 6 percent. That would put it on VW’s level.” What he doesn’t mention is that Toyota’s profit is dropping because it, unlike VW, has actually been selling cars in the US, and so has market share in the world’s largest auto market to lose. Though VW’s neglect of the American market can now be spun as crafty avoidance of the recent downturn, VW will still have to step its game up to truly challenge Toyota. Besides, VW is still playing catchup in the crucial segment of mass-market hybrids. Kudos to Reinking for making a controversial call, but without more evidence it’s hard to picture VW passing ToMoCo anytime soon.

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Voice of Sweden on Oct 28, 2008

Bertel Schmitt> You provide very interesting information! In your perpective what stops VAG from being as successful as TMC?

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Bertel Schmitt on Oct 28, 2008

VoiceOfSweden: First, VAG is no more. (If anybody's interested in the true story behind this unexplained acronym, beg me, and I'll tell it. Sneak preview at http://en.wikipedia.org/wiki/VAG_Rounded .... ) What makes VW less likely to rule ze vorld than Toyota (or, bless their hearts, a combined GM, Chrysler, Ford, Pierce, Fenner & Smith? ) - Arrogance. VW's engineers see the market through German/European glasses. They never could understand why the rest of the world doesn't want to drive a Golf. They always HATED the Jetta. I still remember: "Cupholders? They want to drive drunk?" - Myopia. Until recently, they treated China as a joke. If someone did something really bad in Wolfsburg, he had two choices: Leave, or go to Changchun, VW's Siberia. When someone went there, the automatic question was: "What did you do?" Has changed a little bit in the last 3 years. Well, China makes more VWs than Germany, someone had to notice. - Complexity. Their cars are over-engineered. A new VW has more computers than a mid sized company. Workshops overwhelmed. Too many parts. Many warranty cases are due to misunderstood features. - Quality/Customer satisfaction. An epic and usually losing battle. Do I need to go on?

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Dukeisduke The F&I office on steroids.
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