Toyota cuts spending, increases hybrid development
Click for a gallery of the 2010 Prius
Even mighty Toyota isn't immune to the downturn in sales in the United States due to the horrible current economic climate and credit crisis. Revenue is down nearly 70 percent for the Japanese giant, a situation that it is anything but familiar with. So, Toyota has created a team headed by its President Katsuaki Watanabe that will focus on ways to spend less money. Expect the automaker to extend incentives to more of its fuel efficient models, not just full-size pickup trucks and SUVs, and move quickly to bring more fuel-saving models to market as quickly as possible, especially new hybrids.
If Toyota plans to spend less money overall but more on hybrid development, expect to see its larger vehicles be affected the most by the budget cuts. Models that aren't segment leaders when it comes to fuel efficiency are likely to wait a bit longer for model refreshes as more hybrids are rolled out instead. It should be noted that this is exactly the strategy that General Motors is taking, except that GM is extremely close to running completely out of money while Toyota has got plenty in reserve. GM's continued life depends on its fuel-savers while Toyota's motive is continued profitability, making it painfully obvious that The General should have gotten a much earlier start on its hybrids and EVs.
Gallery: Confirmed: 2010 Toyota Prius
[Source: Inside Line]
Reader Comments (Page 1 of 1)
Noz 9:00PM (11/07/2008)
Hahahaha...take that you POS big 3...you're going down.
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Rob 10:43PM (11/07/2008)
They just didn't get it ......
April 12, 2006:
A core group of US consumers will continue to buy large sports utility vehicles (SUVs) even if gasoline prices rise to four dollars a gallon and stay that way, a senior executive at the Ford Motor Company said.
"There is a certain portion of the marketplace and customers who want that flexibility that is provided with a traditional SUV," Mark Fields, president of the automaker's Americas division, said during a conference with analysts.
"So I don't think our strategy would change too much."
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alex 11:15PM (11/07/2008)
this is very wrong "Revenue is down nearly 70 percent"
If revenue was down 70% i would expect the company to be going bankrupt. There talking about net income (profit), not revenue.
from the article
"toyota reported a 69-percent decline in its quarterly profit Thursday"
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Rob 6:31PM (11/08/2008)
You are correct - from TFA: Toyota reported a 69-percent decline in its quarterly profit.
tekd 3:00AM (11/08/2008)
It's like GM's strategy except for the fact that Toyota is actually putting money into R&D whereas GM is so broke they've killed pretty much all R&D. Which is a terrible long term strategy, but you can't really plan long term when you're running out of money in a few months.
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Mike G 9:36AM (11/08/2008)
Yeah this article is absolutely right. This disaster for the Big 2.5 was a loong time coming. It might not get better, either. I would imagine car companies of the future will be much smaller, producing electric and or hybrid vehicles with a lot of the components outsourced to smaller contracting companies.
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SteveCT 8:32PM (11/08/2008)
In fairness to the Big 3, they have been squeezed in ways that Japan's automakers haven't, most notably health care and pensions, and so they've had to try to compete with Toyota and the others while making less money on every car.
That said, their preparations for the inevitable scarcity of oil were completely nonexistent until about a year ago. And now, even though gas prices are down and SUVs have better sales potential, the credit market is all but dead, so it seems there's to be no relief for our ailing American car companies.
If we do bail them out, I wonder just how much money will be consumed before they can regain their footing.
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