Toyota Lowers Global Sales Outlook; Still Could Beat GM
July 28, 2008
Toyota, as expected, lowered its global vehicle sales target due to the weak U.S. economy, and slow sales in Western Europe and Japan.
Toyota now plans to sell 9.5 million vehicles worldwide in 2008, down from its previous target of 9.85 million. In 2007, Toyota sold 9.37 million vehicles.
Still, Toyota plans to sell more vehicles globally in 2008 than it did in 2007. This could be the year that Toyota ends General Motors' 77-year-reign as the world's global sales king.
GM, which counts vehicles from its Chinese affiliate Wuling in its totals, barely held on to its leadership position in 2007, selling a scant 3,000 more vehicles than Toyota, which includes sales from affiliates Hino and Daihatsu in its numbers. Since then, Toyota has been widening its lead. For the first six months of 2008, Toyota led GM by nearly about 278,000 vehicles.
GM does not release its sales forecast for the year. And both automakers are reporting significant growth in sales in emerging markets such as Russia, China and India. However, GM relies more heavily on North America, where it has been battered more than has Toyota.
Despite its lowered global forecast, Toyota still expects to sell more vehicles than it did in 2007 worldwide. If its sales come in as forecasted, Toyota would report sales up 1 percent from 2007, but that's far slower growth than the past. Toyota's sales from 2006 to 2007 increased 6 percent.
And even Toyota has been hurt in the U.S. Its sales for the first half of this year were down nearly 7 percent, due largely to its truck and SUV sales that dropped twice that amount.
As a result, Toyota is projecting U.S. sales lower for 2008 than previously projected -- its first drop since 1995. Toyota now plans to sell 2.44 million vehicles in the U.S. It previously planned to sell 2.64 million. That compares with 2.62 million in 2007. For all of North America, Toyota has lowered its forecast to 2.82 million vehicles, down 5 percent from its previous forecast.
Adjusting Production
To match supply with demand, Toyota also has adjusted its global production plan to 9.5 million vehicles - the same as 2007. It previously planned to build 9.95 million vehicles.
Like other automakers, Toyota is scrambling to adjust its production to meet consumer demand for smaller, fuel-efficient vehicles instead of trucks and SUVs. To that end, Toyota recently announced it would produce its Prius hybrid at its under-construction plant in Mississippi, which had been slated to build the Highlander SUV. Toyota also has idled Tundra pickup and Sequoia SUV production for three months beginning in August.
Trouble at Home
Just as GM is struggling in its home market, so too is Toyota being hurt at home, where it is the top-selling brand. Toyota now expects to sell 2.23 million vehicles in Japan instead of the 2.27 million it had expected to sell. That compares with the 2.26 million vehicles it sold in Japan in 2007.
Japan's car market has been soft for the same reasons sales in the world's other mature developed markets have been. However, Japan has the added factor that its population is rapidly aging and the small youth market is not particularly interested in cars.
In Europe, Toyota predicts a 4-percent sales decline to 1.19 million vehicles. Toyota raised its sales forecast for the Middle East -- the only region for which it did so.
Falling Profits
Toyota reports its quarterly earnings next week, and analysts predict Toyota's profits will fall by as much as 33 percent to $3 billion from a year ago, according to a report survey of analysts compiled by Bloomberg News. The drop would be due to slumping U.S. sales and the strengthening Japanese yen.
Posted by Michelle Krebs at 6:40 AM under Business , GM , Toyota | Comments (0) | digg this | Seed Newsvine
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