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Toyota’s Bad Day
The Truth About Cars ^ | June 1, 2009 | Ken Elias

Posted on 06/04/2009 5:30:27 AM PDT by CSM

It might be a bad day for GM but it’s a much worse one for Toyota. Really. The days (decades, really) of weak domestic manufacturers shooting themselves in the foot with bad design, poor assembly, and non-existent customer satisfaction in passenger cars are coming to an end. Toyota didn’t have to outrun the bear, it just had to stay ahead of GM, Ford, and Chrysler. Years of producing huge profits in North America hit the wall for Toyota in 2009, and they’re likely not to return. Ever. The game has now changed—and it’s not good for Toyota.

Thanks to US and Canadian taxpayer support, GM and Chrysler are about to get a new start. They’ll enjoy fresh balance sheets, with minimized legacy liabilities and serious money earmarked for new products. (The taxpayers are paying for Fiat to develop cars for North America; you didn’t really think that the Italians would take this risk on their own did you?) Ford, by dint of luck or smart management, borrowed what it needed years ago to make the transformation outside of court oversight.

By the end of this year, all three Detroit automakers will be restructured, resized to match production with demand, and re-energized. They will reenter the market as the lowest cost producers inside the U.S. market, with slimmer, trimmer product lines. These automakers are getting ever-closer to 100 percent capacity utilization.

Looking at product, Ford’s passenger car line up just keeps getting better. The 2010 Taurus looks hot, the Fiesta test drive campaign is generating good press with the Twitter/Facebook crowd, and a new Euro Focus will be here in a two years. Slowly but surely, more Americans are considering a Ford passenger vehicle. Its trucks still lead the category and will continue to do so. Better products, increasing quality, and slowly increasing market share is building FoMoCo momentum.

GM’s go forward brands—Chevrolet, Buick, GMC, and Cadillac—still have some vehicles that don’t cut the mustard with consumers. But the balance is starting to tip back towards the positive. The Malibu and Camaro represent some better efforts. The gorgeous new Buick Lacrosse might give the new Taurus a run for the money. Cadillac will extend the CTS line and bring a new SRX to the market shortly. The Corvette still leads the pack in dollar performance value. And maybe, just maybe, the Cruze and Viva will live up to GM hype machine.

GM’s perhaps two to three years behind Ford with its product development cycle. But it can now concentrate on fewer models. Recent successful launches suggest that GM just needs time to plug the holes for the weak sisters. It now has the money to do so and you can bet (if you’re taxpayer, you already have) that the efforts on fuel efficient passenger cars will receive the bulk of the dollar spend. GM won’t abandon trucks (no matter what Nancy Pelosi thinks) and volume wise, GM leads.

Chrysler can’t do anything under their new pasta-fed management until the re-tooled imports arrive here for production two years hence. Its cars still (mostly) suck, except for the higher-performance versions of its LX cars. But it isn’t going away and will still find some buyers for its products at the pace of the recent past. So this company will just hang on . . . and on . . . and on.

Now, stop and think about this. What has Toyota done for you lately? Is there one single passenger car from Toyota that excites you?

Let’s keep the new Prius out of this discussion for the moment; it’s not a car for drivers but techno-geeks and greens mostly with excitement provided by the fuel gauge, not vehicle dynamics. The Camry might lead the C/D class in sales for now, but will this continue? What happens when Americans actually consider a Malibu or Fusion-based product instead? In terms of design appeal, the Camry looks dowdy or boring (take your pick) and its reliability isn’t any better than the Fusion. Put a four-cylinder EcoBoost engine in that Fusion and Ford wins.

Go through the rest of Toyota’s passenger car line up and compare each vehicle to the current and near future offerings from GM and Ford. The question is: will Toyota customers do the same?

Toyota (or Honda) products have been the default choice. That “Easy Button” is starting to get harder to press for buyers. Yep, Americans will begin to come back to consider Detroit products (at least GM and Ford), and that’s not good for Toyota. And we’ve really never left Detroit for our big pickups and SUVs, whle the Japanese are still mostly playing catch up.

Yep, it’s a bad day for Toyota and a great day for America. You can look forward to a new Detroit that will be competitive, if not lead, in cars and trucks for mass market Americans. Count on it.


TOPICS: Business/Economy; Editorial; Government; News/Current Events
KEYWORDS: auto; automakers; business; chrysler; economy; ford; generalmotors; gm; toyota
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To: CSM

Pollyanna, is that you? Have the unions moved out of Michigan?


61 posted on 06/04/2009 6:19:04 AM PDT by mikeus_maximus (Be a good little white boy--get an education, use your talents, work hard, then give us your money.)
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To: C19fan; Mrs. B.S. Roberts

Congratulations. Your post is the ONLY one to hit the nail on the right end. A car of any kind and size is for the purpose of going from Point A to point B and back again is safety, comfort and ease.
When I need to get “excited” I can look at a Victoria Secret catalog, when I want transport, I buy the car that meets my 6’5” height, my (lessening) overweight and hold all the junk I carry for my boat, and in SAFETY.
My father gave me a good piece of wisdom regarding a new car. “A new car is similar to a fine steak. And look how a steak ends up..in the toilet.”
The “NEW” American cars will be designed by lawyers, environmentalists, bureaucrats, Union heads, politicians and every now and then an AUTO engineer will be permitted a small input.


62 posted on 06/04/2009 6:20:48 AM PDT by CaptainAmiigaf (NY TIMES: We print the news as it fits our Views)
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To: CSM

My parents (WWII generation) drove GM cars and seemed to spend a significant part of their lives getting their cars repaired. I have driven Toyotas (Tercel, Corolla and 3 Camry V-6) for the past 20+ years. They were all extremely reliable cars and worth the money. (The manual 4-cylinder Corolla drove like a BMW).

That said, the styling on the Camry is stale and the pricing on the Solara is too high. Although both are fine cars (and not being discounted these days), my wife and I (both Camry leasees) will be looking at the Mazda6 and the Honda Accord. Note that we will not even consider a car built by the UAW. Never have, never will.


63 posted on 06/04/2009 6:21:46 AM PDT by neocon1984
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To: freespirited

My Lexus is going on 10 years and drives and looks as good as the day I bought it. Zero repair costs. I put on 150 miles a day plus 2 cross-country drives each year. It gets great mileage. I expect the car will easily outlive me. I look back on the crappy Ford and GM cars I owned before the Lexus and wonder why I ever bought those.


64 posted on 06/04/2009 6:22:02 AM PDT by Kirkwood
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To: neocon1984

I can’t speak for the Mazda6, but I leased an ‘08 Accord EX-L V6 last August, and 10 months later I still absolutely love it. At end of lease it will possibly be worth more than the lease payoff.


65 posted on 06/04/2009 6:26:45 AM PDT by Hat-Trick (Do you trust a government that cannot trust you with guns?)
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To: CSM

He’s sort of right about this. Toyota has probably seen its best days, but not because of some great resurgence of GM and Chrysler.

The first thing is that Toyota grew too fast, and its quality, which was never as great as some claimed, is beginning to deteriorate.

Secondly, he’s right about Toyota’s product line. It’s boring, and is being surpassed by everyone else.

The third thing is the elephant in the room that he did not mention: Hyundai. Over the next decade, this is going to be the big challenge for Toyota. Hyundai is going to try to displace them entirely, and they already have comparable quality, and a much better product mix. Toyota doesn’t offer anything like the Genesis, and Hyundai is doing a great marketing job with that car.


66 posted on 06/04/2009 6:32:48 AM PDT by B Knotts (Calvin Coolidge Republican)
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To: Citizen Tom Paine

What I would like to see is an explanation as to why there is apparent “price equity” between manufacturers, especially between UAW and non-UAW brands.

Why does a Toyota Camry cost about the same as a Ford Taurus when Toyota doesn’t have to subsidize legacy costs or union contracted pay-raises?


67 posted on 06/04/2009 6:34:16 AM PDT by Cletus.D.Yokel (FreepMail me if you want on the Bourbon ping list!)
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To: postoak
"Would I buy a car from the Chicoms? You bet I would if it were well-made." The “Chicoms” are to the right of the U.S. now.

Yep. I'd buy a car from the "Chicoms" before I bought one from the fascists. GM is dead to me. Permanently.

68 posted on 06/04/2009 6:36:13 AM PDT by TurtleUp (So this is how liberty dies - to thunderous applause!)
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To: Wyatt's Torch

Take a look at the 2010 Fusion. It’s far from boring.


69 posted on 06/04/2009 6:36:51 AM PDT by scramjet
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To: CSM

Forgot the “Barf” alert.


70 posted on 06/04/2009 6:38:31 AM PDT by Redleg Duke ("Sarah Palin...Unleashing the Fury of the Castrated Left!")
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To: CSM

>The taxpayers are paying for Fiat to develop cars for North America;<

Toyota is quaking in its boots.


71 posted on 06/04/2009 6:39:44 AM PDT by Darnright (There can never be a complete confidence in a power which is excessive. - Tacitus)
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To: B Knotts

Good comments, thanks for the feedback.


72 posted on 06/04/2009 6:39:55 AM PDT by CSM (Business is too big too fail... Government is too big to succeed... I am too small to matter...)
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To: IamConservative
Ford may well compete with Honda and Toyota. However, the author makes a HUGE assumption here;

I have a 2000 F-350 Duel Rear Wheel. I've had all kind of problems with the engine. If Toyota imported a large diesel truck, the Ford would be gone, gone, gone. My T-100 is like the energizer bunny, just keeps on going.

73 posted on 06/04/2009 6:41:14 AM PDT by ALPAPilot
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To: CSM

This article couldn’t be more off.

Toyota, Honda and Hyundai will make a killing in the next few years because people aren’t going to want to buy Government built vehicles. Period.

Simply because the name is American, doesn’t mean it can’t be unAmerican. The business model for GM and Chrysler is not the government’s business model made for them. And THAT my friends, is anti-American.


74 posted on 06/04/2009 6:41:16 AM PDT by JenB987
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To: Citizen Tom Paine

Quality is the issue. We are about to trade an F-150 for a Toyota truck. We usually keep vehicles 9 or 10 years, but getting rid of this after 4.5 years (and less than 50k miles) due to ongoing problems.


75 posted on 06/04/2009 6:41:39 AM PDT by Palmettomom
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To: IamConservative
“How does Ford sit down with it’s labor force, which owns competition, and get a fair deal?”

They couldn't, and that sets Ford in the perfect position to go to court and dump the union.

76 posted on 06/04/2009 6:42:10 AM PDT by Beagle8U (Free Republic -- One stop shopping ....... It's the Conservative Super WalMart for news .)
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To: GreenAccord
Isn’t that Camry the previous generation?

Might be. I just did a Google search for Camry. Here is the 2010:


77 posted on 06/04/2009 6:44:23 AM PDT by Wyatt's Torch (I can explain it to you. I can't understand it for you.)
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To: JenB987

>The business model for GM and Chrysler *is* the government’s business model...


78 posted on 06/04/2009 6:44:34 AM PDT by JenB987
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To: CSM
This guy is dreaming. Toyota makes one misstep in 70 years and it's all over, while the Detroit three have stepped in so much crap on a continuous basis their shoes would make a pig farmer puke. Remember, Toyota is still run by Toyota managers, who have rarely made the same mistake twice, while GM, Ford and Chrysler still have all of those middle and top management chuckle heads who got them into four decades worth of trouble in the first place. Plus I don't see the UAW giving up all those counterproductive work rules they hold so dear.

It's continuous improvement versus continuous implosion. Guess who wins?

79 posted on 06/04/2009 6:45:50 AM PDT by Jagman
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To: Wyatt's Torch
They're talking about the 2010 Fusion, not the old model


80 posted on 06/04/2009 6:46:05 AM PDT by green iguana
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