Toyota scaling back auto production
Toyota is shutting down production significantly in the next two months due to poor sales. The company experienced a bigger percentage decline in the U.S. than GM and Ford. Janet Babin reports 2009 could be a tough year.
Cars ready for shipment at the Port of Yokohama in Yokohama, Kanagawa, Japan (Koichi Kamoshida/Getty Images)
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Steve Chiotakis: It's certainly a month carmakers will want to forget. Sales for the month were down -- in many cases by a third or half. Chrysler's sales plummeted by 53 percent. GM, Ford and -- believe it or not -- Toyota dropped off by more than 30 percent.
And Toyota's taking some manufacturing measures to offset those gloomy numbers. While some other carmakers are trying to get buyers into the showrooms. From North Carolina Public Radio, here's Marketplace's Janet Babin.Janet Babin: Toyota's sales fell 37 percent in December. That's even worse than the declines at GM and Ford. In response, the company says it will stop making cars at its Japanese plants for 11 days in February and March.
At Hyundai, sales are off nearly 50 percent. In an effort to boost demand, the company's offering a new deal for its best customers: If you can't make your car payment, bring your Hyundai back free of charge. The company will cover the depreciation on any returned or leased vehicle for the first 12 months.
Ashvin Chotai is with Intelligence Automotive Asia. He says great idea, but it won't work:
Ashvin Chotai: Although this thing takes away some of the risk, it doesn't take away all of the risk. So I would say it's an innovative tactic, but it's unlikely to have a major impact really.
Chotai expects auto sales will plummet further in 2009 in every significant market in the world.
I'm Janet Babin for Marketplace.
Comments
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From Austin, TX, 01/06/2009
I welcomed this story for shedding light on how things are really tough all over these days. The recent media focus on the troubles faced by the big three has seemed to be an unfair attack on American business and design practices. I have driven American and Japanese cars and my cost of ownership has been lower in American cars. Every one I have bought in the last 20 years has been very reliable. I also like knowing that when I buy American I am supporting the many relatives who gave me a wonderful childhood while working on the production lines for the Big Three. I'm glad they enjoy secure retirements after dedicating their careers to building American products. I only wish the successful American corporations I have built my career with were doing the same for the rest of us.
From MI, 01/06/2009
Yesterday, on NPR, I heard a US Auto Sales Report stating “Chrysler posted a December loss of 53%, Ford lost 34%, GM lost 31% and Toyota also posted a loss” which, in its’ context, insinuated that the Big 3 were the big losers. The truth is that Toyota posted a 36.7% loss in December which was a bigger loss than either GM or Ford. It is important for all listeners to understand that the current drop in consumer automobile purchases has everything to do with the economy and finance opportunity and no manufacturer is immune to this downturn.
Next to housing, automobiles are the single biggest purchase a consumer makes so it is of great concern to the economy of this country that we quickly strive to return consumer confidence and financing opportunity to this critical market. Automobile versatility, economy, environmental impact and quality continuously grow with the advent of ever increasing engineering science and materials technology, the car a consumer purchases today will certainly surpass the previous vehicle it replaces.
The media plays an important role in helping to restore consumer confidence and the road to recovery is lengthened every time a report leads consumers to believe that the problem is in the product and not the economy. I have come to expect misleading news reports from the network news which is why I rely on NPR for the accurate reporting I desire. It should be incumbent upon all reporters to exercise caution in reports that may impact consumer confidence to insure the picture is painted accurately.
From Cookeville, TN, 01/06/2009
Are there any indications that this is a new market norm or is this only going to last until the recession passes?
I'd really like America to exit this recession a little smarter and to make this new found intelligence last...
I remember as a kid of the 1970s people still making their own car repairs to save money. I ahve a few friends and family that do this still but every year it seems fewer and fewer folks do their own repairs or maintenance. This might indicate the rest of the country's preferences of course.
Doing you own repairs can make formerly expensive problems dirt cheap. Take brakes for example. I put new brake pads on my '99 CR-V last weekend. It took about 20 mins and cost $25. Compare that to $65 at the local shop. Yes they offer a warranty against defects. I'd rather pocket the $40 difference. That represents several hours of labor at my job.
I removed my leaky radiator and had it repaired for $35. That would have cost $170 for a new radiator or $170+ if I paid a shop to do the work. A clutch replacement is an even bigger savings. A clutch job might cost me $60-$75 in parts and a whole afternoon but it saves me a thousand dollars. I put a new Haartz cloth convertible top on my other car for $350. The shop wanted $1500. Ouch!
Another upside is I treat my cars better than I might otherwise b/c I don't want them to wear out or break. I also keep them much longer than many of the folks around me. We have 4 cars and the mileages are 120K/190K/170K/155K. Two of them I'd drive anywhere. Two of them are vintage cars waiting restoration.
How did I get started way back when? A relative taught me the basics, I bought a GOOD repair manual (not all books are created equal), bought a basic set of tools and upgraded from that, and did simple things like oil changes, sparkplugs and distributor caps.
From Cookeville, TN, 01/06/2009
Are there any indications that this is a new market norm or is this only going to last until the recession passes?
I'd really like America to exit this recession a little smarter and to make this new found intelligence last...
I remember as a kid of the 1970s people still making their own car repairs to save money. I ahve a few friends and family that do this still but every year it seems fewer and fewer folks do their own repairs or maintenance. This might indicate the rest of the country's preferences of course.
Doing you own repairs can make formerly expensive problems dirt cheap. Take brakes for example. I put new brake pads on my '99 CR-V last weekend. It took about 20 mins and cost $25. Compare that to $65 at the local shop. Yes they offer a warranty against defects. I'd rather pocket the $40 difference. That represents several hours of labor at my job.
I removed my leaky radiator and had it repaired for $35. That would have cost $170 for a new radiator or $170+ if I paid a shop to do the work. A clutch replacement is an even bigger savings. A clutch job might cost me $60-$75 in parts and a whole afternoon but it saves me a thousand dollars. I put a new Haartz cloth convertible top on my other car for $350. The shop wanted $1500. Ouch!
Another upside is I treat my cars better than I might otherwise b/c I don't want them to wear out or break. I also keep them much longer than many of the folks around me. We have 4 cars and the mileages are 120K/190K/170K/155K. Two of them I'd drive anywhere. Two of them are vintage cars waiting restoration.
How did I get started way back when? A relative taught me the basics, I bought a GOOD repair manual (not all books are created equal), bought a basic set of tools and upgraded from that, and did simple things like oil changes, sparkplugs and distributor caps.
From Cookeville, TN, 01/06/2009
So are there any indications that the fall in vehicle sales in temporary (recession) or permanent (shift in buy habits of Americans)?
I'd love for America to climb out of this recession a little smarter and for this new found intelligence to LAST.
From Cookeville, TN, 01/06/2009
So are there any indications that the fall in vehicle sales in temporary (recession) or permanent (shift in buy habits of Americans)?
I'd love for America to climb out of this recession a little smarter and for this new found intelligence to LAST.
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