Auto Industry may have some kind of Revival in 2010

2009 had been a pure disaster in every way for the US auto industry. Even foreign companies like Toyota suffered in the US market. The reason is plain and simple- economic recession. Well, it seems that the worst is really over and 2010 will be a better year. There is a reason for this kind of optimism. In December, car sale has been good and many dealers are happy. The figures for December 2009 are supposed to come out tomorrow. The early signs are good.

USA is still the largest auto market in the world and the most important market too. Well, I am concerned about one thing. In the last few months, US government poured a lot of money in the economy to take it out of the recession. Surely, in 2010, it will not continue and that is why, I am worried for the auto industry evening 2010. 

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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Reuters