Toyota fears backlash over US success
Toyotas don't always have the best looks or the best horsepower or the best driving characteristics, but customers seem to want the company's products the most anyway. They're winning share from other automakers and they're winning on the profit sheet. It's got to be fun right now being Toyota. Its biggest concerns lately are rising North American salaries due to outrageous bonuses due to outrageous profits and how to beat up on the competition without being a poor sport. The only real problem that the automaker is facing right now is that engine sludge issue that could end up costing the automaker billions, but if anybody can afford it, it's Toyota. Besides, nary a word has been spoken in the media about this huge issue, so it probably won't put too big a dent in their quality armor in the eyes of customers.
A presentation by Seiichi Sudo, president of Toyota Engineering & Manufacturing in North America, basically painted a blunt picture of his company's success. We're winning, our competitors are jealous, and we are now the de facto leaders of the auto industry. No complaints here. GM or Ford or Nissan will tell you that Toyota is the benchmark, so that makes them the leader. One look at the new Tundra shows that Toyota isn't just trying to win, it's trying to get the competition to tap out. That doesn't mean that the Tundra is better than the F-150, Silverado, or Ram, but it might very well take sales away from those trucks anyway.
[Source: Free Press]
A newer, more powerful Highlander will only help Toyota's cause
Competitors are upset about the artificially suppressed Yen and point to it as the main reason Toyota is winning. It's hard enough to have a legacy cost imbalance vs. Toyota that that can total $1,500 or more, the Yen is giving Toyota ANOTHER $1,000 (the domestics say that number can be as high as $4,000). Couple that with the fact that most Toyota's are purchased for a higher price than the comparable domestic (after rebates), then you're looking at a profit jackpot for one automaker and losses here at home.
Toyota may have some issues with the newly Democrat-controlled congress, but any legislation that supports a tariff or penalty for a weak Yen would surely be vetoed. President Bush has been on record stating that he thinks its a great thing that foreign governments would artificially weaken their currency just so they can sell products cheaper here in the US (although Toyotas definitely aren't cheaper). His theory is that the customers win with that equation. Right or wrong, congress would need to swing a lot of Republicans if Bush does veto. That probably won't happen.
Other acknowledgments that the document had included not enough minority suppliers and vehicles that are made with more foreign parts than North American. Toyota may be cognizant of these facts, but the buying public here in North America or anywhere else in the world doesn't seem to care. They're the ones that count.
Reader Comments (Page 1 of 4)
Ron 11:19AM (2/15/2007)
Wait a minute...this has gotta be a nightmare for the Big 3. First their cars aren't as good, and then with the ones that are (the trucks)it doesn't even matter cause they're losing the perception battle anyway? Hang it up Big 3 if that's the case. It's one thing to have to build a better mousetrap..if the world thinks the other guy's is better, even when it isn't...how do you compete with that?
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the marais 11:33AM (2/15/2007)
The most interesting aspects of Japan's most recent surge in selling vehicles are:
(1) The weak yen makes their cars artifically cheaper;
(2) Toyota in fact DOES NOT build all Camry's in North America;
(3) Toyota does not support Tier 1-3 North American parts suppliers like the Big 2.5.
The implications are two-fold: (1) Your Camry seems like a good deal against the Fusion and the Malibu because it is several thousand dollars cheaper than it should be and (2) Toyota's manufacturing of automobiles here in the U.S. has nowhere near the economic benefit that Japanophiles think it does.
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D Man 10:48AM (2/15/2007)
I am sure it will be reliable, but man this truck is UGLY!!!
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JGN 10:48AM (2/15/2007)
Man, that Tundra is a sharp looking truck. All it needs is some better rims and beefier tires, for it to look awesome.
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Aaron 11:29AM (2/15/2007)
You guys nailed the tundra right away.A Shat interior and a potentially suspect frame.
They will be hard pressed to keep their momentum and we see some cracks in their finish.
Either way enviable position to be in. Their little labourcostmemo-gate could well spell UAW in the minds of their workers..
I see their stated goal of only producing 60% of what they sell in NA, on NA soil hasn't got much press, nor has the Japanese ends' critical stance on NA expenditures.
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Lithous 10:57AM (2/15/2007)
"Toyota has a culture that stresses both competition and humility, said May, who spent eight years as a senior adviser and instructor for the University of Toyota, the company's Torrance, Calif.-based corporate college developed to teach the Toyota Way principles."
LMAO. Yes, Watanabe showed us his humility.
BTW, interesting things in the report. Let me ask a question, did the LiesAboutCars only include two pages of the report (source: http://www.thetruthaboutcars.com/?p=3115 bottom of editorial but before comments) or is my Acrobat reader broken? It must be that my reader is broken because we all know they are about the (un)truth. Because who would want to know the truth that Toyota is admitting they have a low percentage of U.S. built vehicles and stuff like that. You know, it isn't important, now when one accuses GM of having so much imported content that the import vs. domestic debate is therefore invalid. And that society should expect the company take the place of the other companies should fill the void economically. Totally unecessary info. Not a single American cars about that so leave it out. Only the truth, baby!!!!!!!! Yeah, right.
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Lithous 11:13AM (2/15/2007)
Here is one of my favorite quotes from LiesAboutCars:
"Initially, we’ll bring back the stats and stars, and add a “Why You Should Buy This Car” and a “Why You Shouldn’t Buy This Car” feature (which I designed for Jalopnik)." (source: http://www.thetruthaboutcars.com/?p=3110)
The lemmings over there don't even bat an eye that Farrago has to resort to going back to the past and use a feature he developed for a different site. Paid for the service of development? Hmmm. Sounds like stealing. I.E. try to get paid to develop something for most companies and then use it yourself freely later.
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j 11:20AM (2/15/2007)
FEAR US, TOYOTA SUCKS!!!!
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why not the LS2/LS7? 11:20AM (2/15/2007)
Yes. A backlash because Americans are so jealous over what Toyota has that we don't. See, they're just inherently a better company, they're smarter than American companies.
See, stupid American car companies have lost their way. All they know how to do is make huge SUVs with stupid oversized engines, leading to crappy fuel economy.
But Toyota, as pointed out above is different: "A newer, more powerful Highlander will only help Toyota's cause".
When the American car companies sucessfully lobbied the government for protectionist tariffs, they then turned their sights to making worse and worse cars, even floating the idea of the disposable car (with a life of 5 years). The Japanese taught American car companies a lot then, showing how things can be done a lot better and that the customer will respond.
But that's over now. Now Toyota is deploying the 1980s American car company playbook. Huge vehicles, huge engines and a reduced ability to deliver quality. The only difference this time is the profits get mailed back to Japan.
And I'm not saying don't buy a Japanese car. The feedback loop of capitalism only drives companies to produce the best products if people buy the best products instead of blindly following brand names. And that means looking at all companies and all the models that make sense for you.
If I were GM or Ford, I'd circulate this article widely. Pride comes before a fall, maybe the attitude displayed by Mr. Sudo means good news for GM and Ford.
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rwdmtparkingonly 11:22AM (2/15/2007)
Toyota just produces boring commodities, and Hyundai has better quality. China will crush them when they become an international player. The domestics at least have brands and heritage that people care about, and there are a number of big three cars I would buy: The Sky, the G8, the Camaro, the Mustang, the Challenger, the Corvette and a number of other RWD/MT cars that will come to market soon. The only Japanese cars I would consider are the G35 and IS250(no stick with the 350).
The sun is always highest before it starts to set.
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sp 11:26AM (2/15/2007)
autoblog's article is utter crap. Looks like Chris is trying put Toyota down, really hard.. and most writers do it in every article they write on Toyota...
It is really good that yen is giving Toyota that much on their Tundra, built in the US... lol.
Or the fact that US has artificially kept USD on the low, since GW took office, which is why USD is now worth 30% less than what it was when Clinton was in the office. Which is why GW can not complain about the Yen - US is doing the same thing!
You wouldnt expect so much FUD from automotive writers that are supposed to know their crap, but obviously Cris doesnt....
Hey Chris, hows that LaCrosse crash test going on? Recall?
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rrr 11:34AM (2/15/2007)
Well atleast we know that Chris Skunk i mean Shunk is about as unbiased in this article as Al Franken is towards Howard Dean.
#2 All those who say Japanese FIX their currency which makes their currency low need to take a look at USA Dollar. Dollar is much much lower than Euro, by about a 1/4. So that means all those sales Gm and Ford are losing to IMPORTED CARS should atleast partialy be offset by EXPORTED cars to Europe. BUT IN EUROPE no one wants an American made car and even with this currency imbalance GM still IMPORTS cars FROM EUROPE to USA.
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PuffyC 11:36AM (2/15/2007)
There's no denying that Toyota is the leader today, but there's also no denying that they lead based on past performance, not on current day realities. There are quite a few companies that build better cars and Toyota's quality has slipped quite a bit over the past 5 years. Toyota needs to be careful that they don't all buy into this 'we rock' attitude because unless they make some bold moves fairly quickly they'll soon find themselves playing the role of just another Nissan or Subaru.
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Michael Karesh 11:37AM (2/15/2007)
Exactly how common is sludge in the affected engines? Does it affect nearly all of them? Half? Ten percent? Less?
I've personally never seen such a stat. Anyone?
I'll have such data in the future. But right now people seem to be operating on what they've heard and read, but no actual numbers.
On the political backlash, it's not going to happen if only for the reason cited by the article: Toyota has plants in many states, and those without plants want one. Even Michigan has a Toyota R&D center. How hard does it really want to fight Toyota?
My vehicle reliability research:
http://www.truedelta.com/reliability.php
So far, repair rates for Toyotas range from low to moderate. But I'm not collecting data on any Toyotas older than 2004 yet.
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JGN 11:38AM (2/15/2007)
Is Lithous paid to hate Toyota and other Japanese car makers? It seems to be a full time job.
Next up Autoblog, an ignore feature. I'm a little tired of the constantly obnoxious comments.
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Lithous 11:41AM (2/15/2007)
Aaron writes:
"You guys nailed the tundra right away.A Shat interior and a potentially suspect frame."
--------------------------------------------------
Aaron, you are not correct [/sarcasm]. Here are the facts:
"“What about the Corvette?” she interjected. Yup, the ‘Vette offers unparalleled bang-for-the-buck. But clock that plastic craptastic interior."
"When Toyota developed the new Tundra, they based it on information provided by a research team that traveled America to see how "real" pickup truck buyers use and abuse, love and loathe their vehicles. Once the Tundra was finished, ToMoCo then made sure all their dealers' staff– right down to receptionists– spent seat time in the new vehicle."
source: http://www.thetruthaboutcars.com/?p=3141
You see, craptastic interiors are not in anything Toyota does. It is know funny as hell that someone would put down a vehicle that is performance on a budget, escpecially compared to the Porsche mentioned, and then go on about how Toyota does things with their not-on-a-budget Tundra and you, Aaron, call the interior (in essence) crap.
Now that is the truth about automobiles right there. You have to love the lemmings that think the certain people are so much more credible than others.
LMAO.
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Dugg 11:42AM (2/15/2007)
I get a kick out of some of you nuthuggers. You make it sound like everyone should close up shop. By the same mindset we'd only have Microsoft, Sony, Coke, the Yankees, we'd have shut down the NBA when the Bulls were on a tear, because who was ever going to beat them, and the PGA might as well shut down, because Tiger is number one. Who needs three major TV networks, one is all we need. Yup, life is alright, no one has ever come back from anything to be competitive, just hand over the keys to the building and walk away. Might as well throw out all our bibles too, because there's a new religion in town, its called Toyota.
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rwdmtparkingonly 11:43AM (2/15/2007)
The Sonata is way better than the Camry for less money.
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rwdmtparkingonly 11:43AM (2/15/2007)
The Sonata is way better than the Camry for less money.
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Steve 11:44AM (2/15/2007)
Manipulating currency just seeems unethical to me. Add to the fact you can't sell a US car in Japan without huge tariffs and I don't think they will allow you to build a US plant in Japan. Seems a bit one sided to me.
I have no proplem with Toyota being the #1 automaker but do it on your own two feet without using you goverment to give you an edge.
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