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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Shares of Leading Automakers Fell in US Share Market

The renowned automakers have experienced decline in the US share market in November. Moreover, the percentage of sales volumes in November is not so attractive. General Motors has seen 11 percent drops in its November sales. Ford’s sales percentage remains same though the company experienced 12 percent feel in its sales so far this year. Toyota’s sales percentage in November was also same to the same moth last year.

Now, it is expected that US auto market will experience the worst sales in a decade in the first half of next year. That is why, leading automakers of US market have already reduced their expected production unit next year.

Associated Press reported:

Shares of automakers fell. GM dropped $1.22, or 4 percent, to $28.61 in trading Monday, and Ford shares declined 26 cents, or 3.5 percent, to $7.25. Toyota shares fell $1.53, or 1.4 percent, to $110.92. Shares of Nissan declined 23 cents, or 1 percent, to $22.67, and Honda shares dropped 92 cents, or 2.7 percent, to $33.49.
"Rising fuel prices and sliding home values delivered a one-two punch this month," Jim Lentz, president of Toyota's U.S. sales arm, said in a statement. "But the industry's not down for the count. Demand for fresh, more fuel-efficient products continues to show strength."

It seems that consumers are not interested to car market at this moment. However, reports have it that consumer are becoming much more interested to the fuel consuming vehicle due to the frequent price hike of oil this year. So, the automakers should focus on the current consumer demand and introduce fuel consuming vehicles. Thus, they can come out from the current situation.