Toyota is number two!
New organizations all over the country got out the really black ink last month to report that Toyota had overtaken General Motors as the largest auto company in the world, in terms of world-wide sales.
Don’t hold your breath to see similar coverage of GM’s regaining the lead. The press hates GM and loves Toyota.
But the fact is that General Motors is again selling the most cars of any auto company.
In the second quarter of this year, GM outsold Toyota.
Those of use that live in the United States have a distorted perspective on the war between Toyota and GM.
In the United States, General Motors is considered an old line company with an inferior product and a bloated management. In contrast, Toyota is viewed as the politically correct savior of the planet with unfailingly reliable vehicles. That Toyota recalled more cars in the United States than it sold last year and that the Tundra has been a complete bust is conveniently ignored in the effort to trash Detroit as stupid an arrogant.
But where this mentality is not applicable, General Motors is kicking ass. They are among the kings in China, where Buick is a premium brand. Indeed, though it has endured massive criticism in America for the moves, the Buicks and Cadillacs sold by them in China make the domestic product pale in comparison. Those that suggest that the company could be winning in the United States if the same products were available here are, of course, right. Whether the company could make money on them here, given its labor costs, is another matter.
It is becoming increasingly evident that General Motors is abandoning the American market in favor of markets that offer it a better opportunity and a better return on its investment.
China is one.
Eastern Europe, Latin America, and even Western Europe are others.
While it is common to portray GM as the weak sister in domestic auto sales, it still controls a quarter of the United States market, while Toyota has a mere 15%. In the United States, GM is still the gorilla.
But outside the United States, GM is far more competitive. It was the increase in GM’s sales in the Mid-East, Latin America, and Africa – almost 20% - plus more than an 8% increase in Asian salesa and an increase in Western European sales of almost 5% - that propelled GM past Toyota for the quarter.
There is every indication that General Motors is leaving the United States to Toyota. GM seems to be allocating its capital where it gets the best return on its investment. That’s not the United States.
At the same time, Toyota has made it abundantly clear that its corporate goal is to be number one in sales. Their most recent efforts in the United States, however, have been something of an embarrassment. The recalls are tarnishing the brand’s image. The Tundra rebates eliminate the brand’s image as exclusive.
Toyota is fast becoming another company that has to move the metal. That their cars are not distinctive or attractive only adds to the comparison to General Motors in the last century. Toyota seems to be intent on making exactly the same mistakes GM made in the last fifty years.
In the meantime, General Motors enters the contract negotiations with the United Auto Workers which start next week with the obvious intent of closing operations which do not make money and allocating resources to those with the greatest potential.
That doesn’t appear to be the United States.
There is an old Chinese curse that goes something like this:
“Be careful what you wish for, as you may get it.”
General Motors may be making the wish come true for Toyota.
Whether the wish is a wise one is another matter.
Not only that, but the company has no distinctive identity. Its products copy those of more prestigious manufacturers: the Lexus looks like a BMW as does the Toyota, the Tundra is a cross between an F-150 and a Ram. Only in the Scion line does Toyota divorce itself from copying others, but none of those models come close to being mainstream. Toyota, by its slavish copying of the lines of German automakers, validates their superiority with every car Toyota produces.