By on January 18, 2010

The grass isn't always greener...

Despite what you think of Toyota, it’s a company you should respect. They brought reliability to cars when others couldn’t. They popularised lean manufacturing techniques that others are still trying to copy. And they introduced green technologies at a time when petrol was cheap and still made a success of it. In short, when Toyota put their mind to it, they can make a good success of just about anything… except for the European market. For some reason, Toyota cannot make in-roads in the European sales no matter how hard they try, and the latest set of data suggests that that trend is continuing.

Just-auto.com reports that in Toyota’s European division’s sales for 2009, Toyota branded vehicles dropped 20%, year on year, while Lexus branded vehicles dropped 40%. Over all of their plants in Europe (France, The Czech Republic, Turkey, Poland and the United Kingdom) production fell 26% on cars, 34% on engines and 5% on transmissions. The only bright spots (and I use that term in its broadest definition) were the Toyota Yaris (built in France) which dropped “only” 10% and the Toyota Prius which grew 3%. The head of the European division was trying to stay optimistic. “Looking forward to 2010, we expect a more predictable market in Europe, with an industry slightly below this year’s level”, said Toyota Motor Europe president and CEO Tadashi Arashima. “However, we predict a positive development of our market share. We saw clear signs for this upward trend already in the fourth quarter of 2009 when we started to benefit from our renewed model line-up, especially in the private car market. Furthermore, enhanced product offers in the important mainstream and premium C-segments will support our sales in the coming years, with the introduction of the Europe-built Auris HSD and a brand new Lexus hybrid model, two industry firsts in these strategic segments.”

Toyota are putting a lot of emphasis on hybrid technology to come to their rescue. However, don’t forget that diesel is also big in Europe and with Volkswagen pushing their Bluemotion cars, Daimler with BlueTec and Ford’s Econetic range; not to mention Nissan’s Leaf and Renault’s electric fleet, Toyota better prepare itself for war. With 2 competitors who shouldn’t be there (Vauxhall/Opel and Chrysler) every piece of the pie is that much more valuable.

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20 Comments on “Toyota And Europe: An Unrequited Love...”


  • avatar
    Paul Niedermeyer

    In the mid to late eighties, the European manufacturers were scared shitless about the coming “Japanese wave”, seeing what havoc it created in the US. And for some time, they made some good inroads. For some reason, the Mazda 626 of the eighties was very much loved in Germany, and the top selling Japanese car there. And a segment of the population really did get it about their reliability, and bought Toyotas and Hondas. But the momentum was lost some ten or fifteen years ago, and the European manufacturers have other worries than the Japanese.
    Its a fascinating story about why they haven’t been able to gain more traction in Europe, and one that tells a lot about the difference of priorities Americans and Europeans place in the cars.

    • 0 avatar
      stuki

                      Some observations spring to mind regarding differences between Europe and here:
       
                      The US auto press is heavily SoCal based, meaning cars never did rust. In much of Europe, for a long time, rust killed (or at least maimed beyond respectability) cars before any mechanical gremlins killed them. Audi for a long time was playing up their superior longevity due to underbody rust treatment. As the post rust-as-a-problem era extends, Toyota’s reliability edge, if real and can be maintained, will become harder to overlook.
       
                      For a long time, the European market was segmented, with higher barriers to both auto and parts trade across borders. And at the same time, people spent less on cars. Resulting in a tougher climate in which to grow a continent spanning dealer and repair network to compete with incumbents.
       
                      In any European country, the total cost of labor, as well as manufacturer / labor relations are more uniform across regions and employers. In America transplants moving into free states had the opportunity to beat up on incumbents, who had one hand tied behind their backs by pre “Japanese invasion” labor commitments and traditions that the newcomers did not have to put up with.
       
                      Europeans are, as a rule, more willing to be led by the nose by “experts”. I doubt there is a more powerful marketing slogan than “Test Winner!” on that continent. If Americans bought what the magazines and papers liked to the same degree, more of us would be driving 3 series sized European wagons with taut suspensions and manuals, as well. Instead, in the US, perhaps as a result of kids buying their first car younger, opinions about brand differences are more likely to be formed by college age experiences with repair costs, and frequency, of 200,000 mile beaters that are treated like sh^&.
       
                      In the US, the Japanese got a huge break from the incumbents being so stubbornly incompetent they gave up the entire compact market without a fight. Just as the huge baby boom generation were in the “small, cheap car” stage of their life, and oil prices exploded. In Europe, the Japanese actually met some opposition.
       
                      In Europe, where “everyone” drives a compact, people’s desire for at least some modicum of individuality, pretty much ensures many different compact cars are offered. The kind of segment dominance achieved by Civics and Corollas over here just isn’t likely across Europe for any car. And this also means styling takes on more importance relative to simple objective reliability.
       
                      In Europe, people are, as a general rule, fairly nationalistic, and certainly Eurocentric. In America, half the country is convinced everything American either sucks, or is evil. And the other half drive trucks.

  • avatar
    HerrKaLeun

    somehow that reminds me of VW that is successful anywhere but the US, mainly due to complete wrong marketing and targeting.
    Toyota isn’t big on diesels and those are 50% of new cars due to lower tax on diesel fuel. they also are pretty expensive, more than VW.

  • avatar
    Bimmer

    Just look at the styling of mainstreem cars in Europe: Peugeot, Citroen, Renault, FIAT, various VW Groupe (Skoda, VW, Seat) Opel, Ford. Then look at Toyota styling… There’s your answer.

  • avatar
    Adamatari

    I have a feeling that part of the answer to the question of why Japanese makes, especially Toyota, don’t do as well in Europe is the same as why foreign makes don’t do well in Japan…  Barriers to entry, government support of national brands, and nationalism among buyers as well.
     
    Though HerrKaLeun has a point, even the world’s other big monster has a market it can’t crack – perhaps just as VW somehow doesn’t fit American expectations, Toyota doesn’t fit European expectations.

  • avatar
    Joel

    “success of just about anything… expect for the European market.” should read “success of just about anything… except for the European market.”

  • avatar
    Martin Schwoerer

    OK, here I go. Here’s why Japanese cars are successful but not dominant in Europe. Most factors are historical — they just didn’t get it in the past and this reflects on current brand strengths — but plenty are still right there. Pardon me if I make this quick&dirty, it would be editorial-strength if details were added.
    Company cars: much higher percentage than in US. Often based on industrial co-relationships and union influence.
    Fuel economy: Japanese cars are seldom seen as class-leading, often as so-so.
    Ride-handling compromise, driving dynamics: A Golf Mk2 or a 1980s-1990s Peugeot flowed through the curves and dealt with bumps in a smooth, relaxed fashion. Steering feel used to be generally better. 
    Resale through slow model evolvement: You buy a European car, you can reasonably assume it will be built for 6-7 years, so its successor won’t quickly kill your resale. Japanese cars (used to) change too often.
    Attention to running-cost factors such as insurance: in Europe, repair costs influence insurance premiums. A Golf has low premiums, a Daihatsu high.
    High-speed durability: German makers pride themselves in making cars that can be driven at top speed, all day. Don’t do that with a Nissan.
    Crash-testing: The Japanese makers were late to this party; Honda in particular had some catastrophic test results in the 1990s.
    Pride with own industries: All things being equal, buying national, or at least buying European, is seen as the thing to do. “But why did you have to buy a Japanese car” is what any businessman will hear if he drives up to a client in a Toyota.

  • avatar

    See new story on the Toyota sales enigma.

  • avatar
    Martin Schwoerer

    Cammy’s point, if I may read between the lines, is not that European car makers are not afraid of Toyota or that Daihatsu has a low CSI. Everybody is afraid of Toyota. (But who gives a shxt about Daihatsu?) 
    What is significant is the large disparity between Toyota’s world-wide success and Toyota’s lukewarm reception in Europe. One little case in point: Toyota develops an improved, European version of the Corolla and names it Auris. Auris subsequently sells worse than Corolla.

    • 0 avatar
      Mirko Reinhardt

      One of my friends recently bought a new Auris 1.6 to replace his ’97 Corolla. The bland exterior styling is inoffensive enough, but the interior has to be seen to believed. Hard, thin plastics rendered in bizarre shapes – I wouldn’t be surprised if H.R. Giger had designed it.

  • avatar

    Martin: It’s not that Toyota has a lukewarm reception in Europe, all Japanese, or for that matter, all foreign brands have a hard time in Europe. According to ACEA data, Japanese brands have a total market share of 13 percent in Europe. I remember the days when Japanese brands were not even broken out individually in our sales statistics, they showed up as “Japanese.” Europe is chockablock full with car manufacturers, who generally ain’t stupid.

    Again, Toyota is doing quite well in Europe, selling more cars than BMW or Mercedes. There is a problem with the statistics, and it could be that the problem is in Russia,

  • avatar
    Dynamic88

    Does anyone have reliability stats on popular Toyota/European cars for comparisson?   (I mean models sold in Europe)

    • 0 avatar
      Mirko Reinhardt

      Here you go (ADAC breakdown statistics 2008)
      http://www1.adac.de/Auto_Motorrad/pannenstatistik_maengelforum/pannenstatistik_2008/tab.asp?ComponentID=250016&SourcePageID=250114

  • avatar
    A is A

    I am Spanish, and I own a superb 2004 Toyota Avensis (the Scion tC is based on the Avensis).
    I bought second hand in 2008. Once I signed the papers I asked the seller (a Mercedes-Benz dealer, nonetheless) why my used Avensis had such a… nice price (11750€, if you are curious).
    The seller answered: “Because it is a Totoya”.
    Me: “But Toyotas are very good cars”.
    Seller: “You know that. I know that. But the average Spanish buyer does not know that. Your Avensis being a Volkswagen Passat I could charge 3000 more Euros with no problem. Being a Toyota, it lacks “image””.
    Me: “WTF?”.
    Seller: “Look: When I sell a used Toyota I never have to honor the gurantee, because the guarantee expires well before any problem appears. I can not say the same for Volkswagens, Renaults, Peugeots or Citröens. I agree with you that the “image” issue with Toyota makes no sense, but that´s the way it is”.
    The “Toyota image problem” allowed me to own a car two steps above the Corolla.
     
     

  • avatar
    Paul W

    Martin Schwoerer: I’m puzzled by many items on your list. Toyota has excellent resell value. Japanese cars don’t have higher insurance premiums. I’ve never heard anyone accusing Japanese cars of being unsafe. “High-speed durability”? Since when did the European continent get paved with no-speed-limit autobahns?
    An average European car buyer is looking for something that is A) made in Europe, B) runs on diesel, C) is fun to drive.

  • avatar
    Nutella

    I still think that residuals on Toyota are inferior to the leaders (german brands mostly), the lack of of competitiveness of their diesel engines ( more tax, based on larger engines with the japs). The handling is also a n issue: few Japanese cars are as good as european ones on the many narrow and windy roads of Europe.
    Style is an issue: blandness doesn’t help in style conscious europe.

  • avatar
    MadHungarian

    Is that a wagon?  A real wagon, not a Venza monstrosity?  Hey Toyota, if the Yurrupeens won’t buy it, why don’t you try it out on us?  Please?  Pretty please?

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