Toyota to Pass GM

[TSX69]

http://money.cnn.com/2005/10/26/news/international/toyota_gm.reut/index.htm

Toyota to put GM in rearview mirror
Report: Japanese firm to lift output to 9.2M cars in '06, topping GM as No. 1 auto manufacturer.
October 26, 2005: 7:25 AM EDT

TOKYO (Reuters) - Toyota Motor Corp. will raise vehicle output by 11 percent next year, unseating General Motors Corp. as the world's biggest manufacturer of automobiles, a Japanese newspaper reported Wednesday.

Toyota, whose profits and market value already dwarf those of its rivals, plans to raise group output to more than 9.2 million vehicles worldwide in 2006, or nearly 1 million more than its projection for 2005, business daily Nihon Keizai said.

Excluding minivehicle and truck units Daihatsu Motor Co. and Hino Motors Ltd., Toyota's own-brand production will rise 12 percent to 8.3 million units next year, the newspaper said without citing sources.

A Toyota official said the company had not yet finalized its production plans for next year.

But one analyst said it was feasible given the pace of Toyota's expansion plans.

"Given additional production and domestic and overseas plants that are scheduled to go on stream in FY2006/07 (ending March 2007), global production of about 8.3 million units can be reached," Merrill Lynch auto analyst Tatsuo Yoshida said in a note to clients.

Helped by a reputation for building reliable and fuel-efficient vehicles, Toyota is picking up market share from loss-riddled GM (Research) in the U.S. company's home market.

The Detroit giant's market share for October looks set to fall to a 25-year low of about 20.5 percent, according to New York-based Deutsche Bank analyst Rod Lache.

Toyota had 13.4 percent of the U.S. market in September, more than Chrysler's 13.2 percent and up from 11.3 percent a year earlier, while GM's share fell to 25.9 percent from 31.7 percent.

Like Toyota, GM has not announced production plans for 2006.

But Japan's top auto manufacturer has said the group aims to sell 8.5 million vehicles in calendar 2006, which would likely keep it as the world's second-biggest seller of automobiles behind the GM group.

Sales and production figures can differ widely depending on how much inventory an auto manufacturer and its dealers hold.

In the first nine months of this year, the Toyota group built 6,124,434 vehicles worldwide.

GM produced an estimated 6,718,000 units during that period, and sold 7,066,774 vehicles, up 3.7 percent from the same period last year.

For all of 2005, GM has forecast global production of 9,115,000 vehicles.

The Detroit-based auto manufacturer has been cutting back production at home to whittle down its bloated inventory, but it is expanding rapidly in China, where it is set to overtake Volkswagen AG as the No. 1 brand this year.
Race in China

Toyota, whose market capitalization of $160 billion is almost 10 times that of GM's, is racing to catch up with GM and others in China, while also planning increased capacity in North America as well as in Russia and other fast-growing emerging markets.

On top of a fifth plant due to start production in China next year, Toyota said Wednesday it was preparing to set up a sixth car factory in the northeastern city of Tianjin with local partner FAW to build about 200,000 compact cars a year starting in mid-2007, pending government approval.

Toyota, which was late to enter the hot Chinese car market, is targeting a 10 percent share by 2010 with a full line of products, including its imported premium Lexus vehicles and the Prius hybrid to be built locally by the FAW-Toyota venture.

Globally, Toyota has set a goal of boosting market share to 15 percent and annual revenues to ¥20 trillion ($173.7 billion) in the medium term.

Toyota is due to announce production and sales plans for 2006 in December.

Subsidiaries Daihatsu and Hino have not solidified plans for 2006, but they will likely raise combined production next year from the 890,000 units projected for this calendar year, supported by brisk domestic demand, the Nihon Keizai reported.

In July, Toyota revised up its own-brand global output forecast to 7.39 million vehicles for this year, up 10 percent from 2004, while increasing its group-wide output plan to 8.28 million units, up 9.7 percent.

The revision came after the maker of the Prius hybrid car announced strong growth in global output for the first six months of the year, driven by healthy domestic and U.S. sales.

With rival Nissan Motor Co.'s chief executive Carlos Ghosn turning bearish on the U.S. market recently, one fund manager said Toyota could emerge as the sole winner after a solid streak at all of Japan's top auto manufacturers.

"Japanese auto makers have had to grab market share from GM or Ford, but that's coming to a limit and now they have to steal share from each other," said Akio Yoshino, a fund manager at Societe Generale Asset Management. "So far, Toyota is winning."

Shares in Toyota ended up 1.96 percent at ¥5,210 and Daihatsu rose 0.71 percent to ¥1,137. Hino was up 0.85 percent at ¥713.

[kyotousa]

that is amazing.....

[ChinchillaX]

In China GM is behind Volkswagen, but is gradually gaining market share there with Buick and Chevy. Toyota has had a slow start in China, mainly because they entered late (within the past 8 years). They are behind VW, GM, and Honda in China. However, they will have a tough sell to many Chinese since many have a grudge against the Japanese because of their acts and killings during their invasion of China before WWII.

It was inevitable that Toyota will surpass GM with GM the way they are now.

[hotpursuit]

I hope Toyota passes GM, that will be really good news especially for crybaby Jack Roush. I probably will never buy a Toyota, but I really hope this happens. Maybe then some American company (besides German Chrysler) will finally decide to make good cars.

[TSX69]

http://news.yahoo.com/s/ap/20051220/ap_on_bi_ge/japan_toyota;_ylt=AirLum8cFWHC_uXxqNdPfmms0NUE;_yl u=X3oDMTA3b2NibDltBHNlYwM3MTY-

Toyota Plans to Produce 9M Vehicles in '06

By YURI KAGEYAMA, AP Business Writer 1 hour, 34 minutes ago

NAGOYA, Japan - Toyota said Tuesday it plans to produce 9.06 million vehicles in 2006, threatening to overtake struggling U.S. rival General Motors as the world's biggest automaker.

Although General Motors does not give full-year production targets, Toyota's forecast will put it neck-and-neck with GM and possibly allow Toyota to take the lead. GM produced 6.7 million vehicles during the first three quarters of this year and expects to produce about 9 million vehicles this year.

Toyota Motor Corp., Japan's top automaker, has been growing at a time when General Motors Corp. has been stumbling, losing $1.6 billion in the third quarter and seeing its market share in North America chipped away by Asian automakers, including Toyota.

Toyota's production target, announced by President Katsuaki Watanabe at a news conference in Nagoya, central Japan, marks a 10 percent increase from the 8.25 million vehicles Toyota expects to produce this year.

Like Toyota, other Japanese automakers, including Honda Motor Co. and Nissan Motor Co., are also in good health.

Honda said Tuesday in Tokyo that it projects global sales in 2005 will have risen 5 percent from a year earlier to a record 3.35 million vehicles, while vehicle production worldwide will have gone up 7.2 percent from last year to 3.41 million cars.

Koji Endo, auto analyst with Credit Suisse First Boston in Tokyo, believes that Toyota is strong because it has ample money to invest in facilities and research that in turn allows it to produce cars that appeal to the market and cut costs, thereby producing more profits.

With Toyota booming on a "positive cycle" of healthy sales leading to more sales, it's definitely on track to overtake GM in annual vehicle production, he said.

"It's bound to happen either next year or the year after," Endo said. "But perhaps there isn't much point to the question. It doesn't make much sense to be comparing vehicle production numbers between the world's most profitable automaker and one that's on the verge of collapse."

Toyota said it expects to sell 8.85 million vehicles worldwide next year, up 9 percent from 8.09 million estimated for this year.

When not including its subsidiary automakers Hino and Daihatsu, Toyota plans to produce 8.11 million vehicles next year, up 10 percent from 7.37 million vehicles in 2005.

Watanabe played down Toyota's possible imminent No. 1 status in the world auto industry.

"We try to prepare our production and sales to respond to customer needs in every region," he told reporters. "I am not thinking much about whether we will become No. 1 in the world as a result of that."

Watanabe also brushed off fears about a possible U.S. political backlash of protective sentiment that intensified in the 1980s, noting that Toyota has boosted production and parts purchasing in the United States, and become a good corporate citizen.

"I do not anticipate trade friction to grow into a major problem at this time," he said.

Peter Morici, University of Maryland economist and auto industry expert, believes that GM, Ford Motor Co. and the
United Auto Workers, the U.S. labor union, do not enjoy much public sympathy, compared to the 1980s.

"I do not believe the U.S. public will support protection for GM. If the government does it, it will have to be veiled," he said.

Detroit-based General Motors has announced drastic cost cuts, including trimming 30,000 jobs, or 27 percent of its North American manufacturing jobs, and the closure of 12 facilities by 2008.

GM's U.S. market share fell to 26.2 percent in the first 10 months of this year compared with 33 percent a decade ago, the result of increasing competition from Asian rivals. Standard & Poor's Ratings Services lowered GM's debt to "junk" status earlier this year.

GM isn't the only U.S. automaker cutting costs.

Ford Motor Co., which reported a third-quarter loss of $284 million, has said it plans to eliminate about 4,000 white-collar jobs in North America early next year as part of a restructuring plan.

Ford Chairman and CEO Bill Ford has said he plans to announce U.S. plant closings and layoffs in January.

Watanabe said Toyota has succeeded because it followed its dream of being the first in the world to produce the best cars at the lowest costs. And Toyota isn't about to sit on its laurels, he said.

"It's critical we maintain our spirit of perpetual challenge," Watanabe said.

[West6MT]

I am not surprised by this at all.