Toyota taking over

Manufacturing News, Source : The Manufacturer US
Published : 21 Dec 2005 16:16

Toyota is on the verge of overtaking General Motors as the world’s largest automaker. Having displaced Ford as No. 2 in 2003, Toyota has continued to grow, while GM’s market share has been falling.

Toyota announced its intention yesterday to produce 9.06 million cars in 2006. While GM does not publicly predict its output, industry consultant CSM Worldwide estimates that it will make 8.92 million vehicles. GM has occupied the No. 1 spot for over 70 years.

While some believe that losing the top position is another nail in the coffin of the US automotive industry, realists point out that although market share may be symbolic, it is not the main business driver. "Market share is nice; profits are essential," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. "The ultimate goal in this business is not market share. The ultimate goal of a company is profitability. It's an issue of pride perhaps, but pride can get you into bankruptcy; profitability never will."

GM took another hammering on Wall Street after the Toyota announcement, however, with shares closing at $19.85, down $1.20 from Monday. Investor Kirk Kerkorian’s announcement of his sale of 12 million shares of GM stock for tax purposes could also have been a contributing factor. GM shares are now at their lowest since October 1982.

Comments on this story

click here to add a comment