GM’s failure evokes fear of “the 80s Japan bashing” among Toyota executives

Till now, GM has been the major competitor of Toyota Motors in USA. Now that GM is in bad shape, Toyota should be happy but Toyota executives are afraid that the failure of GM, Chrysler and Ford would rejuvenate Japan bashing that took place in the 80s. Today, Toyota officials said that they wish GM to recover from its losses.

Poor consumer expenditure hurt American auto industry. Yasushiko Ichihashi, Senior Managing Director, Toyota Motor Corporation said that his company does not see GM’s failure as an opportunity. He wished American market would return to health soon. Toyota hopes for an overall recovery of the US auto-market. US automarket is the biggest market of Toyota Motor Corporation. If GM fails today, Toyota might fail tomorrow. Because of the economic recession in USA, Toyota Motor posted its first annual loss since 1950 in the current fiscal year. In March, the condition of auto sales improved a bit. Americans bought 857,735 vehicles in Mach, a 25% rise compared to February. Ichihashi said that the number shows that there is still hope for recovery.

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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. Bloggingstocks.com

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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Nissan Motor Company: Aiming for emerging markets

Nissan Motor Company’s CEO Carlos Ghosn told the reporters on Thursday that the car market in most of the developed countries would stabilize by 2010. He said that auto makers should focus on emerging markets. According to Ghosn, US auto market will experience recession in 2008 and stabilize by 2009-10. Reuters reports:

"Japan at best will see stagnation, West Europe at best stagnation, the U.S. is slumping in 2008 and at best in 2009-2010, we will see stabilisation," he told a news conference.

"The growth will come from emerging markets."

Ghosn, also head of Nissan's majority shareholder Renault SA (RENA.PA: Quote, Profile, Research), repeated that the two companies remained open to expanding their alliance to a third member but that they were in no rush.

Two years ago, billionaire investor Kirk Kerkorian proposed an alliance with General Motors Corporation. Nissan’s recent deal with Chrysler again sparked the alliance rumor but Ghosn said that it was an OEM (original equipment manufacturing) deal.

Japan’s third largest auto maker is now entering the next phase of its business. On May 13, it will disclose its new five year business plan. Carlos did not disclose any detail but he said that the company is re-engineered and restructured and now it is ready to compete again.

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