Quote Of The Day: Toyota Wants More For Less
“There have been companies that have gone belly-up for carrying excess capacity, but no company has gone bankrupt for not being able to produce, We now realize humbly that we shouldn’t make cars until we’re absolutely certain they will sell.”
Toyota’s Executive Vice President Atsushi Niimi to Bloomberg.
Volkswagen, still planning to dethrone Toyota, isn’t outselling Toyota just yet. Outspending? Definitely. Volkswagen plans to spend $53.5 billion in new property, plant and equipment in the next five years, $10 billion more than ToMoCo.
Toyota wants to produce more cars without spending additional money. “We are challenging ourselves to produce more even as we restrain capital spending,” Akio Toyoda said yesterday at NAIAS.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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There's building to a price, and there is building to a quality standard at the best possible price point. The former got GM its reputation, the latter built the Japanese theirs. GM is learning, the Japanese are getting pounded by what looks to me like malaise, plus currency fluctuation, and some serious competition. Competition is good, currency fluctuation is largely out their control (but adaptation is possible), and getting off their duffs and designing and engineering great vehicles people actually want is well within their abilities if that is their goal.
Caption suggestion: "Wonder Twin powers, activate!"
Maybe I'm going to be accused of being overly patriotic and just a tad more concerned than I need to be, but I really hope that the Chinese do NOT make inroads into America's automotive scene. I'm already dismayed enough when 100% of the items I buy in most any store these days comes from China and wonder when (if ever) the general American public will wake up and really see just how far we've slipped. Maybe I'm wrong, but we can't generate personal (and national) wealth without making/building goods, and that includes a strong automotive sector. Maybe cars will be the tipping point for us in attempting to rebuild our national manufacturing sector...or (more likely) it'll just be one more nail in the coffin as we move to becoming a subset of the Chinese economy. I'd rather see the D3 (what's left of them) take the road of a Hyundai/Kia, versus Toyota...better value, more content, a killer warranty and entertaining styling to combat the competition, but maybe I'm asking for too much.
Toyota is right. Over-capacities are a nightmare and need to be avoided. As the costs are immense, this is nothing but a massive incentive for bean counters to find other ways to save money. Nobody will profit from such scenarios. It's just a loose-loose game for everybody involved.