Economy Grabs the Spotlight at New York Auto Show
March 20, 2008

You know the economy is bad when the endlessly thriving Toyota says it may not hit its sales targets.

Remarks by Toyota executives in South Korea on Wednesday about the economy echo those being made by other auto company executives during this week's press days for the New York auto show where the economy, more than the cars, grabbed the spotlight.

Toyota: Missing its Target
Toyota executives told reporters in Seoul, where the Japanese automaker announced Wednesday that its Toyota-branded cars will go on sale in South Korea next year along with the Lexus models it already sells there, the company may miss its global sales targets and is struggling with rising material costs.

Toyota executive vice president Tokuichi Uranishi said the automaker may miss its 2008 global sales target, which had been set at 5 percent above 2007 sales levels, due to slowing sales in major markets and the strengthening yen. The yen hit a 13-year high against the U.S. dollar this week.

"Sales in the U.S., Europe and Japan are showing signs of slowdown. It will be difficult to meet the group’s sales target of 9.85 million, although emerging markets such as China and Russia are active," Uranishi told reporters, according to the Financial Times.

Toyota Chairman Fujio Cho said rising raw material prices are another concern. "The rise in raw material prices has been excessive this year. Coping with this is one of our top priorities," Cho said, according to the London newspaper.

Back in U.S.A.
Meantime, in New York this week auto-company executives, particularly those representing Detroit automakers, said they were preparing cost cuts and other belt-tightening measures in case a slumping U.S. economy hurts sales more than expected, The Wall Street Journal reported Thursday.

GM is pushing some capital expenses from the first quarter to later in the year to make sure it has enough cash if the downturn in the U.S. market worsens, the paper said. GM Chief Operating Officer Fritz Henderson has been quoted of late saying GM does have enough cash to weather the current economic storm.

Mark LeNeve, GM's head of sales and marketing, told MediaPost industry sales were tracking the way the automaker had predicted and should pick up in the second half. However, LeNeve admitted, last week's collapse of investment banker Bear Stearns shook the automaker's confidence.

Ford executives said that company is considering options to cut costs further to reach its goal of being profitable by 2009. Ford CEO Alan Mulally said the automaker can handle the slump, even if it falls to the low 15 million range. He said Ford has the cash and liquidity it needs, but needs to execute its restructuring plan to downsize to match demand. Ford is in the process of counting the number of union workers who took buyout packages by the Monday deadline. Mulally seemed to be hinting that the number was under the automaker’s goal by warning workers the company had other mechanisms to shrink the workforce.

Chrysler CEO Bob Nardelli, who was the keynote speaker at the New York auto show’s opening session Wednesday, said the automaker is positioned to weather a downturn and is on track to return to profitability “in the not too distant future.” The company said it had met its goal of cutting 10,000 jobs through buyouts; workers are to be gone by the end of June.

Posted by Michelle Krebs at 7:59 AM under Business , Chrysler , Companies , Ford , GM , Toyota | Comments (0) | digg this | Seed Newsvine