Toyota Stumbles Towards Another North America Loss
With the Japanese Yen hovering around the 91 to 1 U.S Dollar exchange rate, a bullish VW focusing on boosting their market share in North America and Ford rising up, Toyota are probably a bit depressed. Business Week reports that, for the second year in a row, Toyota have resigned themselves to the notion that their North American division will post a loss this fiscal year. This will, almost certainly, have a knock-on effect in Toyota’s ability to turn a profit in the North American market, even after more cost cutting. “The finance company is having a solid year, so if you include that it will be so much easier to say positive things,” Yoshimi Inaba, Toyota’s North American chief executive, told reporters in Detroit. “We are still trying hard to improve (sales and manufacturing operations).”
The markets aren’t entirely convinced with Toyota’s efforts to reduce costs in North America. “Cost reduction in the U.S. hasn’t progressed much,” says Koji Endo, general manager of Advanced Research Japan in Tokyo. “There’s more room to cut costs there, but what’s most needed in the U.S. would be further reductions in parts and workforce costs.” This puts a lot of pressure on Yoshimi Inaba as he was headhunted by Akio Toyoda specifically to turn Toyota’s NA division around.
One issue which will have ramifications for Toyota in North America are their quality issues. “The one thing they have to rectify is they took a reputational hit because of some quality issues, the recall.” said Efraim Levy, a New York based equity analyst at Standard & Poor. “If it persists then it can become very damaging.”. What does Mr Inaba have to say about this issue? “The solution is addressing the cause of this issue,” Inaba said. What a feeling! And that feeling, I suspect, is anxiety.
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