Tuesday, June 03, 2008

Toyota lowers its expectation over US automarket

Because of rapid decline in truck sales, the top three American automakers: Ford, GM, and Chrysler are losing market. GM may observe its auto sales falling below 20%. Because of slow economy, falling home values and rising gasoline prices, people are losing interest in buying big trucks and SUVs which are the prominent products of the American automakers. Because of its high quality fuel efficient vehicles, Toyota Motor Corporation (TYO: 7203)may have survived the fall but ultimately the company would not be able to avoid a drop in sales.The top Japanese automaker is now thinking of lowering its US sales forecast.

Now, the Japanese company is beginning to realize that the US auto picture is so bad that even its quality and fuel-efficiency may have limits when the world's largest market falls into a recession. According to the FT, "Toyota, the world's top-selling carmaker, is considering downgrading its US sales forecast to account for a worsening outlook for pick-up trucks and other big vehicles in its largest market."

Toyota had hoped to sell 2.64 million vehicles in America this year.

The USA is Toyota’s biggest market. Like its rivals, looking at the rising sales in the first quarter, Toyota became very ambitious and invested heavily on its pick-ups and SUVs. As a result, it is now suffering from lower sales. Still, Toyota will be able to pull through this recession for its hight quality products and strong financial condition compared to other automakers.

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The Wall Street Journal