Toyota: Growing Sales and Presence in Downtrodden Japan Market

Toyota: Growing Sales and Presence in Downtrodden Japan Market

By Peter Nunn

TOKYO -- Last week Toyota posted record half-year earnings, including a blockbuster $7.9 billion in group net income. Japan’s most successful automaker also has a couple of other things to celebrate.

Toyota has long dominated its home market, but even by its standards the sales results for October were pretty remarkable. Last month, Japanese vehicle sales dipped again, down 1.3 percent, according to Japan Automobile Manufacturers Association (JAMA) figures. Yet Toyota beat the market with an aggressive sales surge of 7.9 percent.

What’s more, somewhat freakishly, eight out of the Top 10 bestsellers were Toyotas.

Furthermore, if you check out that Top 10, you’ll see that all models, bar one, are up and in a soft home market like Japan’s, it’s been a very long time since that’s happened.

Fine, but what’s sparked this mini-turnaround? And is this a one-off, or the start of a long-overdue recovery in Japan’s home market?

Japan’s media puts it down to what’s known as the ‘new car effect.’ A rush of new models have come to market. Toyota, for instance, has unleashed a barrage of 12 new models this year and that’s obviously shaken things up.

Then, there’s the ‘Tokyo Motor Show effect,’ with all the hoopla surrounding Japan’s major auto show that has got buyers fired up about cars again.

A more sober examination of the fact, however, points to two things. First, only a few of those 12 new Toyotas have actually made it into the Top 10.   A couple of new entries, the Mark X ZiO and Corolla Rumion, were carefully branded so as boost sales of the existing Mark X and Corolla line-ups.

Even so,  eight of the top 10 best sellers were Toyotas and that must send a shiver or two down the spines of a few rivals.

A Toyota manager admitted that since July, Toyota had been making a series of sales promotions, coupled with new model intros, to boost the market. When you check out the numbers, you can see how effective that strategy has been.

Only the Honda Fit (Jazz) and Mazda Demio (Mazda2) were able to live with this Toyota onslaught; Toyota’s big push kicked Nissan out of the Top 10 completely and boosting the company’s sales by an impressive 7.9 percent for the month.

How long Toyota can keep this up remains to be seen, although Toyota certainly has the cash and wherewithal to do whatever it takes and outlast anyone else.

Not even Toyota can ignore the fact that car ownership is getting longer in Japan, however, on average 11.7 years now, up 30 percent from the late ‘80s bubble economy era and an amazing 70 percent from the ‘70s.

In the end, it depends how hard the others want to fight to grab a share of a seemingly ever-declining pie. As one paper put it, “survival competition gets heated.”

Source: Japan Automobile Manufacturers Association

Source: Japan Automobile Dealers Association

Photos by Toyota

1 - Toyota Corolla Rumion

2 - Toyota Mark X ZiO

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.