Toyota shifts design direction with the 2013 Avalon.
Toyota officials, all the way up to President Akio Toyoda, have routinely insisted that being number one was never their goal, and so they downplayed the fact that production cuts forced by last year’s Japanese earthquake and tsunami led Toyota to tumble to number four on the global sales charts, behind General Motors, Volkswagen AG and the Renault-Nissan Alliance.
Nonetheless, company officials aren’t exactly complaining about the fact that they were back in the saddle, again, at least for the first quarter of 2012 when sales by the various Toyota brands surged 18%, to 2.49 million, propelling the maker past its arch-rivals.
“Although being No. 1 is not the main goal for us, it’s nice to see because hopefully it shows we’re on the right track,” said Jim Wiseman, Toyota’s North American vice president of external affairs. “With customers reacting so positively to all of the new and updated products we’re introducing this year, we’re optimistic the good momentum will continue.”
Toyota became the world’s largest automotive manufacturer, based on sales volume, in 2008 as GM started its headlong plunge into bankruptcy. The U.S. maker wasn’t expected to regain its position were it not for the March 11 disaster that all but shut down the Japanese auto industry and left Toyota struggling for critical parts for most of the rest of the year.
But the maker has shown a sharp rebound since the beginning of this year, earnings during the January – March period, the final quarter of fiscal 2011, quadrupling. And President Toyoda, the grandson of the maker’s founder, is forecasting more good news ahead. It foresees earnings to double in the new fiscal year.
On a volume front, the maker anticipates worldwide sales of Toyota, Lexus, Scion, Daihatsu and Hino-badged vehicles to jump 1.3 million units, to 8.7 million during the 2012 fiscal year, which ends next March 31.
It has been nonetheless a challenge for Toyota, notably in the key U.S. market. The maker has had to sharply ramp up marketing efforts, incentives in particular, noted analyst Jesse Toprak, of TrueCar.com. And that trend is continuing, Toyota givebacks rising 4.4% in April compared to the month before. Meanwhile, the maker has also ramped up less profitable sales to fleet customers, something Toyota has normally shied away from.
But that appears to be paying off, U.S. sales up 12% for the first four months of this calendar year, ahead of the industry’s overall 10% growth.
Whether that momentum can be maintained remains to be seen. Its competitors, Korean manufacturers Hyundai and Kia and Japan’s Nissan, in particular, are intent on grabbing some of Toyota’s share.
So is Volkswagen AG whose CEO Martin Winterkorn has not shied away from proclaiming his personal goal of landing as the industry’s global sales leader in the second half of the decade – if not sooner. And VW has an advantage in the critical Chinese market where it is second only to GM in volume and well ahead of Toyota.
Toyota hopes to grow sales in that booming market, as well, but anticipates only a modest 11% gain, to 1 million, still well behind both VW and GM in China.
What may make the difference is product. Toyota is still building momentum with the new Camry sedan and Lexus GS it launched last autumn and has new models such as re-designed Toyota Avalon coming. But GM and VW are rolling out plenty of their own new products. And Nissan CEO Carlos Ghosn has projected that the all-new midsize Altima coming this year could topple Camry as the midsize segment leader.
So, while Toyota has seldom backed away from a fight it is clear that 2012 could be a tougher battle than it’s used to.