Toyota Motors have been very open about their plan of grabbing the number one spot from General Motors this year. And sadly, with the present turn of events for General Motors it is not impossible for it to lose its post to Toyota.
According to analysts for this year, Toyota Motors will succeed in overtaking General Motors and will become the new largest carmaker in the world. Looking back in the year 1931 when GM became the world’s numero uno, threats of toppling it down seems to be impossibility.
General Motors has been the world’s number one automaker for the past 70 years and if ever Toyota really do surpass GM that would have an intense psychological effect on the entirety of the US industry which is sadly to say the last manufacturing sector where Americans still lead.
One of the reasons cited for General Motors sudden plunged is its failure to adapt its production methods to meet the changing consumer tastes. General Motors have failed to realize that it would not always have the same edge that it has like in the year 1955 when four out of five cars in the world were US made and half of them were products of GM. This probably was one of the reasons why GM is in its dismal state right now since it has become too confident of its standing in the auto industry and failed to see the imminent danger that would challenge its position.
The edge of Toyota over General Motors is the fact that the Japanese automaker was concentrating on changing its production system to become more efficient and leaner. The complacency on the part of GM was countered by Toyota with relentless pursuit for excellence which resulted to the changing fortunes of the two companies. Although, it is wrong also to construe that GM products are deteriorating in quality but the main point is that the automaker has been very lax lately which has given the Japanese automaker the chance to grab most its market share.
Until the time comes that Toyota be officially proclaimed as the new number 1 automaker in the world, General Motors will continue to lead as the world’s largest carmaker in terms of vehicles produced and auto parts manufactured and that includes products like GM grille guards. The only question now is for how long?
There are speculations around the auto industry that Ford and General Motors will be offering discounts for their customers. It is believed that the Michigan automakers will be offering discounts for their vehicles by the last weekend of this month.
According to sources inside the companies, the sales incentives will be offered before the Fourth of July. It is expected that General Motors will be offering zero-percent-financing or selected auto models. For Ford, it is yet unclear what they will be offering by the end of the month but it is expected that the car manufacturer will offer terms similar to General Motors.
Jim Cain, speaking for Ford though, said that there is noting to announce concerning month-end sales incentives. General Motors, on the other hand, through spokesman John McDonald announced that they are panning a sales event around the Fourth of July holiday. Aside from that, McDonald and General Motors declined to release any further information.
Historically though, American car manufacturers offer big discounts in the summer. This is done to get rid of late model vehicles on their dealership lots to make way for new models. It is expected that by fall this year, 2008 model year cars will be introduced one after another.
Jess Toprak, an analyst for Edmunds, expects that the discounts will be offered with Ford and General Motors’ SUVs and pickup trucks. With car buyers turning their back on light trucks, it is of course practical on the part of Ford and General Motors to get rid of their slow moving items. The incentives that will be offered with their pickup trucks will also be a response to Toyota’s move of offering rebates for the Tundra.
“Historically, you do tend to see a ramp-up (of discounts) at the end of June through the end of summer,” says Toprak. The current situation that Ford and General Motors are in would most likely result to the car companies offering discounts for their vehicles.
The sales incentives that General Motors may work with may be in connection with the release of the live-action film “Transformers”. The movie features four General Motors vehicles. These four vehicles are the Chevy Camaro, Pontiac Solstice, GMC Topkick, and a Search and Rescue Hummer H2.
General Motors stated that they are looking to take advantage of the attention that the film will attract from the general public. The popularity of the film may be used by General Motors to augment its other marketing campaigns.
Last month, General Motors posted an increase of 6 percent in sales over May of 2006. With the speculations that the company will be offering sales incentives, it is expected that General Motors will have another month of increased sales.
Ford, on the other hand, has had a disastrous May this year. Sales for the Dearborn, Michigan-based car manufacturer fell by ten percent. If it is true that the company is looking to offers discounts, it may serve as EBC rotors and brake pads in stopping the downward slide of the sales output of the company.
The auto buying public though would still have to wait whether the two companies will indeed offers sales incentive for their vehicles.
During the first quarter of this year, it was announced that Toyota surpassed General Motors to become the largest automaker but only for that period of time. But Automotive News recently reported that Toyota has already outsold the Detroit, Michigan contingent last year.
It was expected that Toyota will have to wait until the end of the year before it can claim the spot occupied by General Motors in 76 years. But recent figures quoted by the Detroit-based weekly publication Automotive News shows that Toyota has already toppled General Motors from its Number One spot since last year.
The publication reported that Toyota sold 128,000 units of automobiles more than General Motors last year. This development came after Automotive News found out that General Motors included in their sales output the number of vehicles sold by a Chinese company that they have a minority share in.
“A little-known Chinese microvan played a role in Toyota's victory,” says the publication on its website. This refers to the seven-seat microvan manufactured by a three-way business enterprise composed of General Motors, the Shanghai Automotive Industry Corp and Liuzhou Wuling Automobile. General Motors included the number of vehicles sold by the venture under its own sales output even though it owns only a minor share.
Automotive News gave the credit of the 420,140 units that the business venture has sold to the Shanghai Automotive Industry Corp since it owns 51 percent of the business entity. General Motors sale was then cut down to 8,679,860 units. This is less that Toyota’s sales output of 8,808,000. This gives the number one spot to Toyota in terms of sale.
General Motors though insists that they have done the right thing by including the sales of Wuling-branded vehicles in their sales report. “We own a majority of the legally available shares of the company. It's completely integrated in our China strategy,” says General Motors spokesman Tom Wilkinson. “That's why we count them,” he added further.
With the ongoing trend, Toyota is looking to surpass General Motors both in sales and in production output. Even a very efficient EBC Greenstuff brake component cannot stop the Japanese car manufacturer’s climb to the top of the auto industry.
Analysts though agree that losing the top spot may be beneficial to General Motors. Aaron Bragman, a research analyst for Global Insight based in Troy, Michigan, is one of those who believe that losing to Toyota may be beneficial to the Detroit-based car manufacturer. “Losing the crown as the world's largest automaker could even end up benefiting General Motors,” he said.
“There's nothing more motivational than losing your top stop. If it's going to take that to motivate the troops more than anything has already, I think it’s a boon to the company,” Bragman explained.
The title of being the world’s largest car manufacturer though is based on the number of vehicle produced not by the number of vehicles sold by a particular car manufacturer. This means that General Motors is still the largest car manufacturer to date. The carmakers stay on the top though is expected to last only until the end of the year. General Motors expects to sell 9.2 million for this year while Toyota projects 9.34 million. That means that Toyota will be producing more automobiles to fill that projected demand.
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