• May 8, 2008
The current economic environment in the United States is hurting all auto makers these days, even mighty Toyota, which was once considered immune to so-called market realities. Though its overall performance last year would be considered a stellar achievement for any other automaker, Toyota's 28 drop in annual profits in 2008. If Toyota's revised forecast proves accurate, 2008 would break a nine-year stretch of profit growth. In addition to the slowing U.S. market, Toyota also cites high material prices, the worldwide credit crunch and a strong yen as contributing factors in its mild downturn.
Toyota's expected profit drop is certainly newsworthy, but we just have to wonder how the money-losing American car companies will cope in the U.S. market with the same issues. While sales of cars are gaining strength, the SUV and truck markets are sinking with what could be Titanic-like implications for the truck-heavy lines from Ford, Chrysler and GM.

[Source: Toyota]


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  • 16 Comments
      • 6 Years Ago
      Well it's bad news for the entire auto industry.
      That said...Toyota tends to make very cautious estimates of their own profits.
      For example, they predicted a 4.5% drop in profit for 06-07, but they ended up gaining 20%. So their predictions usually tend towards doom and gloom.
      Still, the entire auto industry really is facing some serious challenges so Toyota's predictions might actually come true.
      • 6 Years Ago
      Automotive news reported this week the new car market is going to shrink by nearly 1 million units this year. Thats a pretty big drop from an average of about 16 million per year.
      • 6 Years Ago
      "which was once considered immune to so-called market realities."

      What idiot would consider any corporation immune to market realities? Where do you guys get this stuff from?
      • 6 Years Ago
      Insiders say their loss could have been cut in half had it not been for the massive amount of money spent on Tundra repairs and all the other recalls.
      By the way, the G in God is capitalized.
      Dumb a$$.
        • 6 Years Ago
        So sad (crappy dave) ,you do know that there are real auto sites out there that test these vehicles on a day to day basis right?not that autoblog isn't one ,cough !!but please do some research,K?let me help you out .there is this real website name edmunds.com,yes they keep vehicles in their fleet for one year and use them as they are supose to,yep the Tundra is there likewise the Silverado,please check them out,if you dare.



        http://blogs.edmunds.com/roadtests/category/cat.2007ToyotaTundraSR5DoubleCab?@50.imHycBQxMtA@

        http://blogs.edmunds.com/roadtests/category/cat.2007ChevroletSilveradoLT
        • 6 Years Ago
        Thedevil @ May 8th 2008 8:31PM

        So sad (crappy dave) ,you do know that there are real auto sites out there that test these vehicles on a day to day basis right?not that autoblog isn't one ,cough !!but please do some research,K?let me help you out .there is this real website name edmunds.com,yes they keep vehicles in their fleet for one year and use them as they are supose to,yep the Tundra is there likewise the Silverado,please check them out,if you dare.


        The Devil,
        maybe you should get out and talk to real truck owners like myself, instead of relying on places like Edmunds. The word in the truck world is stay away from the Tundra, it is a pile of crap, and they are pretty near on. A relative owns a Toyota dealership, he will tell you the "T" in Tundra stands for "Trouble", the truck is filled with problems, mostly engineering problems, problems that cannot be repaired by a dealer. His words, "Toyota thought all that was necessary to make a large truck was make a bigger small truck", he has a pile of unsatisfied customers. Word of mouth gets around, unless Toyota makes some big improvements the bottom is going to fall out for the Tundra.

        If there is one thing I have learned from the internet it's this, most of these car evaluation sites don't know beans about cars or trucks.
      • 6 Years Ago
      Well it's bad news for the entire auto industry.
      That said...Toyota tends to make very cautious estimates of their own profits.
      For example, they predicted a 4.5% drop in profit for 06-07, but they ended up gaining 20%. So their predictions usually tend towards doom and gloom.
      Still, the entire auto industry really is facing some serious challenges so Toyota's predictions might actually come true.
      • 6 Years Ago
      This sucks, but is nothing new. Vehicles got bigger and bigger as people forgot about gas lines from a decade ago and the deacade before, very short memories. Now, its a market correction... again. My H2 and sports cars are now idle most days while I drive my new 08 Civic. I can afford the gas, I just refuse to pay almost $4 a gallon when 30+ MPG vehicles are readily available and affordable. My talks with local auctions and dealers tell me the small cars are all the rage, I just hope people who can't afford 15 MPG vehicles remember this.... this time around. Stop keeping up with the Jone's and keep up with your budget. No one is impressed by your SUV.
      • 6 Years Ago
      Before these comments continue let's all try to be a little mature and cut out the anti-foreign or anti-domestic automotive comments as it has absolutely nothing to do with what this post is about.

      Posting how much you hate Toyota or any other company, how much a company sucks, how ugly a car they produce, or whatever negative comments here only proves that you know nothing about economics and are truly ignorant.

      These are hard times for everyone, not just Toyota. Businesses all over the country are suffering except healthcare. People are talking about recession, the credit crisis, and mortgage crisis is keeping (and teaching) most people from spending money that they just don't have and may never have. Definitely the talk about buying a new car to most is truly preposterous when their finances are at stake, which in turn most auto dealers, as well as any sale field, will suffer.

      I myself still drive my 99 Mitsubishi 3000GT VR4 and probably still will continue to drive it until I know that I the average car payment of whatever I choose to buy next I can afford to make 3-4 car payments in 1 month's total income. This mostly means that I prefer to save my money for retirement, vacations, and property in another country and spend only when necessary rather than to be broke the rest of my life trying to impress others with big houses, big cars...etc.
      • 6 Years Ago
      Now is this good or bad news?
      • 6 Years Ago
      Before all of you start throwing dirt on Toyota, let's not forget that they still made a $3.19 billion profit for Q1. Compare that to Ford's $100 million profit and GMs' $3.3 billion loss.

      Toyota may be down, but they are far from dead and buried...they are on pace for a $12 billion profit for '08. Ford and GM would love to have 1/10 of that.
      • 6 Years Ago
      Right, and forget about relying on small cars being sold, all segments are going to suffer, period. Unfortunately, most people risiding in the US have very little savings. I've been in financial industry for quite a long time, and took notice that most are over-leveraged and have no liquidity. This in turn means that obtaining financing to purchase a $14k Yaris is not going to work out, unless there is an at least $1k downpayment.

      Current environment is going to predominantly hurt Chrysler, if not put them out of business, or force them to be bought outright by the Chinese.

      In fact, any business related to US consumer, or any banks reliant upon collecting debt from businesses in servicing sector, are all going to get burnt big time. Think credit crunch is over? Think again.

      2008 & 2009 are going to be very ugly, and I would strongly advise people to own their cars outright, and rent their properties. Futhermore, reduce use of credit cards, put most investments into swiss francs, new zealand dollars, yuans, gold, silver, platinum, agricultrual stocks, mining stocks and so forth.

      Fed is following the same policy that most Eastern European counties have followed, that is devalue their way out of trouble. Unfortunately, unlike in 1980's this cannot happen because of how bad our debt is, and who holds it.
        • 6 Years Ago
        Your right. The debt culture in this country is like a ticking bomb waiting to go off.

        The only debt I have right now is my house payment and I wish I didn't even have that!
      • 6 Years Ago
      Just regarding jp's comment, I'd like to say that there are plenty of horrible dealers with Honda and Toyota as well...just step into a used Toyota dealership-I actually had a sales manager curse at the salesman in front of me, then insult me. Of course that's just how that one (craptastic) dealership was, my family's also had smooth experiences with other Toyota dealerships, and I was even pleasantly surprised by how nice a dealership's service department was. That same dealership also had a Buick store, and they were about as nice as any dealership had ever been...I wasn't even there to buy a car (they knew I was there because my car was in the service department) and they were super friendly anyways.
      At the end of the day I think the experience really depends on the dealership themselves, since there are plenty of scumbag dealerships out there for most brands. With the exception of Lexus and Saturn I'd guess.
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