Toyota Stumbles Towards Another North America Loss

Cammy Corrigan
by Cammy Corrigan

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.

Cammy Corrigan
Cammy Corrigan

More by Cammy Corrigan

Comments
Join the conversation
3 of 43 comments
  • Carlson Fan Carlson Fan on Jan 13, 2010

    "These problems [sludge, camshafts on tundras, etc] are just not significant and are not reflected in the owners’ surveys. BUt these fanboys will continue to bring them up as if these were major problems. " I've got 3K in repairs bills on a Toyota Highlander due to sludge problems that says different. My neighbors Lexus clone did the same thing. What a completely awful vehicle in so many ways. I will never spend money on a Toyota again. Excuse me while I go give my Chevy a hug!

    • Len_A Len_A on Jan 13, 2010

      And I personally know two Lexus LS owners who had the same problem on their V-8's, so the problem wasn't with engines manufactured in the USA only. Plus the Toyota fanboys need to talk to, in addition to yourself, owners who report on sites like: www.toyoland.com/sludge.html and http://www.yotarepair.com/index.html Toyota's quality problems aren't a myth or exaggeration. They're as real as the problems the Toyota fans gripe about other automakers having.

  • Runfromcheney Runfromcheney on Jan 13, 2010

    Its like what they say in Hollywood: What goes up must come down.

Next