Toyota North America “no longer profitable” – report

By Matt Brogan | July 22nd, 2009

A report published in the Detroit News yesterday from the CEO of Toyota Motor Sales USA, Yoshimi Inaba, has revealed that the company’s operations in North America are “no longer profitable”.

Mr Inaba cites current market forces and “boring” cars as some of the reasons behind the brand’s downfall.

Following Toyota’s runaway success in the region over recent years the news comes after the announcement three months back of the company’s first-ever full year operating loss.

It seems that despite the Japanese manufacturer’s drastic cost cutting measures US sales were down 38 per cent for the first half of 2009, outpacing the overall market decline of 35 per cent.

Mr Inaba says that although the downtrodden economy is undoubtedly behind some of Toyota’s sales decline, he also blames the company’s current model lineup.

“Toyota is a good car but not exciting. Those are the comments we usually (or) always get,” said Mr Inaba.

Mr Inaba went on to say that Toyota’s future vehicles will be “more exciting and more nimble” when the company’s North American operations do return to profitability next fiscal year

HAL

Wow, I can’t believe a senior executive went public with such a derogatory statement about their cars, regardless of how true it is. Interesting times ahead for Mr Inaba I’d say.
Bavarian Missile®™

Quote ” Mr Inaba cites current market forces and “boring” cars as some of the reasons behind the brand’s downfall.”

Thank god someone in Toyota has realised what the rest of us have known for some time.
gearboxdawg

Shocking news to say the least. Toyota was going to be the no. 1 auto-maker in the world by output. Seems like hard times has hit Toyota very hard.
Golfschwein

OH NOOOOOOOOOOOOOOO!!! How can this be???
Nobody

Finally! Thank you Mr Inaba! Hopefully this means Toyota will use it’s vast resources to bring consumers a car that’s relatively great to live with and interesting to drive around. Can’t complain about something like that now? Also hopefully this will mean that Lexus will finally make cars that are as interesting to drive as their European competition.
Fernando

I drive a Toyota Camry altise 2006. I believe the Toyota Camry is the standard by which most cars are judged. It is very difficult to find anything annoying and it almost never breaks. It also provides everything in a adequate level.
However, I’m not excited with my car at all. No fun to drive and dull design. But I think it is Toyota. So people buy them!
Howie-R31

Toyota are one of my favourite brands because of cars they used to make like;
Chaser, MR2, Supra, ae86, soarer etc…
What do they make now that are exciting as these vehicles were/are?
NacaYoda

Toyota’s are cars for people who don’t care about motoring. Their car is a tool, not a toy, nor a hobby.

These people just want something that does what it says it will, is cheap to service and won’t give you any trouble. These people buy a Toyota. And Toyota will continue to produce cars that sell in great volumes based on their ability to deliver on these points. No matter how boring they might be. The economy is the only reason they are “not profitable” in the USA.

In many ways Nissan has fallen into the same mold. Most of their lineup is boring but functional. Unfortunately they have, of late, fallen short of the other points that would otherwise attract non-motoring-enthusiasts.
http://aca Leone

Toyota’s North American lineup would certainly benefit from further streamling of which i believe is the intention of Akio Toyoda.

The Camry Solara recently got the chop (about time) while i understand the Avalon will go in due time aswell alongside an adjustment of Toyota’s SUV and 4WD fleet

Toyota Motor Corporation is an extremely capable car maker with much respect from the general public but i equally believe a subtle shift of culture in the right direction would further positively position the brand for the future and just quietly, Akio will deliver.

Over the past few years, many car makers have gone through a period of adjustment / overhaul and it appears time is right for Toyota to complete the same.
http://aca Leone

Nacayoda – many 4WD enthusiasts find Toyota off-roaders a great hobby but i do understand what you are generally implying.

What Toyota needs to do is inject more passion into it’s mainsteam fleet while maintaining the reliable yet functional aspect of thier cars.

I think it would be resonable to suggest that Toyota makes great luxury vehicles (Lexus), 4WD’s, SUV’s and competitive passenger cars but lack resonably priced sports cars for the general Joe.

Fix this standout issue and it will go alongway to resurrect passion in the brand. Also, thier motorsport achievements over the past few years have been maturing aswell which is a good thing.
FrugalOne

WOW!!

Amazing that a big-knob of BigT[tm.F-0] admits that the cars they are making [in the USA] are boring!

That comment should be framed!

Anyway, BigT[tm.F-0] have the #1 selling car in USA so i don’t see the issue, it’s tough out in the field atm, the storms passing though!

Cheers,

F-0
Golfschwein

Oh, hi D!ingo! Couldn’t resist, couldja, Little Fella? Confirmation of Toyota crumbling brought you out of your lair at the risk of losing your people’s home through having to pay legal bills.
Direct Injection

Boring cars is what Toyota is all about…….nothing new with that news.

Toyota dont do very well in Europe either, they have better taste in cars over there!!
VW Freak

Now if only Toyota Australia will admit the same thing. C’mon Mr Buttner, admit it! And tell your friends in Japan to WAKE UP!!!
http://aca Leone

Direct Injection – no Japanese car company does very well in Europe and of all the Japanese brands in that part of the world, Toyota is the biggest volumn seller. On the otherhand, there are markets around the world that European car markers are not great volumn sellers in and apart from the North American market, Australia is one of them.
Flying High

Where or where is “TP”? If only we could see your take on this now mate. Too bad you are not posting comments anymore.

Praise be to ‘Yoshimi Inaba’. Finally someone in Toyota calling it as it is – which anyone with a bit of nouce has known for years.

Vote 1 Yoshimi Inaba for Toyota CEO.
Tom

Looking at the sales figures for Toyota in the US does paint the obvious picture. Whilst the Camry is the highest selling car in the US (shudder) overall, sales have tanked. Scion, Toyota’s youth brand, has tanked near 60%, and Lexus, which only survives thanks to its US success, is down nearly 44% for the year so far. I think a large part of it is because they had the perfect run of success during the oil price spike last year and the resultant media halo they received. This year, one oil prices are down, which helps other manufacturers who have less green images, and two other manufacturers have caught up. Ford now has the Fusion hybrid which successfully takes on the Camry hybrid, and most manufacturers have heavily updated their small car line-ups during a time Toyota has not released any updates. Toyota has allowed the competition to catch back up and it’ll take a lot of work to be in such a strong position again. They have now lost their second place in sales back to Ford in the US, after giving GM a run for their money for first place early last year. And they were busy expanding production just as the recession hit, when all other manufacturers were in the process of downsizing, leaving Toyota with very low plant utilisation levels and several shutdown plants.

Consumers are cottoning onto the fact other Japanese manufacturers, and Korean, produce cars that are just as reliable but without the insomnia curing boredom of Toyota’s current lineup. Toyota has more than just Ford and VW to worry about.

Good to hear though that some Toyota senior execs see the actual problem and not just blame the recession. When your sales tank further that the industry average at a time your competition is going bankrupt, you know its more than just a market downturn.
John

Mr Inaba says” “Toyota is a good car but not exciting. Those are the comments we usually (or) always get,” said Mr Inaba.”

Was he deaf before now or has Toyota’s sales decreasing returned his hearing and his eye-sight ?

Lexus are also going down the gurggler for the same reason in the States.
http://aca Leone

Tom – I believe it would be a fair comment to say that over the next couple of years, Akio Toyoda will steer the brand into a slightly different direction assisted by a more streamlined operation.

Furthermore, Toyota doesn’t exactly have an aged fleet but more accurating a relatively young one in many regards however many other car makers began rejuvenating thier range not long after Toyota invested considerable capital releasing many new models. Infact, Toyota Australia alone turned over just about it’s entire range over a 3 year period not so long ago.

While i acknowledge Toyota has taken a sales dive over the course of the economic slump, they do however continue to sell alot of vehilces globally and apart from remaining the 3rd largest car seller in the North American market, still the only brand in Australia to sell more then 15 – 20 000 units per month.

In recent months, Hyundai has achieved some good results but the question is – will they continue to achieve when buyers begin returning back to more expensive cars as the economy improves while Ford has improved not only on the back of some great new cars but also respect it received by not asking for financial assitance from the US government or any other body for that matter.

Car makers i believe to watch-ot for over the course of the next few years : Toyota, Ford, VW group and to a lesser extent, Hyundai.
http://Caradvice.com.au Baddass

The Toyota Sequoia is so dated, just look at its design.
http://aca Leone

The Sequoia is a good unit, based on the Tundra and now being sold in the Middle East.
Tomas79

Golfschwein Says:
“July 22nd, 2009 at 1:00 pm
Oh, hi D!ingo! Couldn’t resist, couldja, Little Fella? Confirmation of Toyota crumbling brought you out of your lair at the risk of losing your people’s home through having to pay legal bills.”

If the above post doesn’t brake the code of conduct, i don’t know what else will?!!
Golfschwein

I NEVAAAAAAHHH!!

You’d love to give me another five thumbs down, wouldn’t you, Tomas79? But you can’t! They’re gone. Nyuk.
Reckless1

“Fernando Says:
July 22nd, 2009 at 12:03 pm
I drive a Toyota Camry altise 2006. I believe the Toyota Camry is the standard by which most cars are judged.”

Forget about Golfy’s post – the quoted post here breaks all the rules…….poster should be banned for thinking the Camry is the benchmark car, haha.
Golfschwein

hehe…somebody’s watching.
Tomas79

Golfschwein Says:
“You’d love to give me another five thumbs down, wouldn’t you, Tomas79? But you can’t! They’re gone. Nyuk.”

Golfschwein, have you stooped so low as to suggest, that i would use multiple votes?!!

WTF i would do that for?? who cares about stupid Thumbs up and thumbs down??!
Trump

From my point of view, reliability is much harder to achieve than styling. Why then do Toyota let themselves down so much with styling?
Jason

I do not understand why people keep saying that Toyota is reliable. In the last month, I’ve seen 5 Camry’s broken down on the side of the road. The last car I’ve seen that had “something” wrong with it was a Rav4. Stuck at the lights!
Wheelnut®™

Certain people on here often criticise Holden over the fact that they haven’t been able to make a Profit in Australia for the last 5 years – which includes the recent boom times..

However; if a car company isn’t able to make a profit in the world’s biggest most competitive markets – a market where cars are a lot cheaper than what they are here and therefore; [on average] people upgrade their cars every 4-5 years.. as opposed to 8-10 years like they do here in Australia

Then the situation for Toyota is just as bas as it is for Holden if not worse.
Tomas79

Jason,
I don’t know where you live, but i see way more commodores, on the side of the road here, then anything else, let alone toyotas!!

Wheelnut says,
“Then the situation for Toyota is just as bas as it is for Holden if not worse.”

Are you on drugs, or obviously not very bright!!
G.M went Bankrupt in U.S…
SteveH

Wheelnut, comparing Toyota in the US to Holden in Australia is a real stretch isn’t it? Due to a massive decrease in car sales across the board, Toyota US is forcasting a loss this year, then a return to profits in the following year. Holden on the other hand, as you stated, haven’t even been able to make a profit when new car sales were booming here in Australia. How on earth can you compare the two?
Wheelnut®™

Tomas read my comment again I wasn’t talking about nor did i metion GM… I was talking about Holden [Australia] which isn’t that profitable

In the same way that according to the article Toyota [North America] isn’t that profitable.

If I was talking about GM I would have mentioned them but once again as usual you’ve made assumptions; gone off half c@cked; got completely the wrong message and come back with a yet another response which is [as always] on the offensive – complete with personal insults.
Wheelnut®™

Steve H – Holden was actually on target to record a profit last financial year [08-09] that was until the GFC hit..

Toyota US may be expecting to make a profit next year – whether or not they do so is another matter.. who knows this could be just the beginning of a succession of losses for Toyota

But I was focussing more on the US market where as I said cars are cheaper and people upgrade more often which both have a positive effect on sales – Sure the US were hit by the GFC [hell they caused it] yet despite that GM still received 15;000+ advanced orders for the Camaro…. So if there are that many people with the money to buy a “premium” sports car – than surely there are just as many; if not more people who able to buy an entry level Toyota of some kind

I suspect that there are its just that they have decided to look elsewhere.. so maybe Toyota aren’t that good in terms of value for money etc as we are lead to believe
SteveH

Holden may have been on target to make a profit in 08-09, but once again they didn’t. Also, comparing the Australian market to the US is a bit unrealistic. As you say, cars in the US may be cheaper, which would mean there is less profit in each vehicle. Therefore if the market takes a downturn, it is only natural to assume that companies will take losses. I also wonder what facts you are basing your thoughts on Toyota making successive losses.
Wheelnut®™

Steve H – I know people should compare apples with apples; However as history has shown it very rarely happens [if at all]

I mean there are people on here comparing a 4cyl FWD sedan to a RWD 6 Cyl sedan despite the fact that they are different sizes have different characteristics etc.
So how is comparing the Australian and American car markets any different?

In relation to your comment about their being less profit in the cars sold in the USA.. not exactly – given that they sell more cars over there; the cost per unit of the cars would be less therefore; they could keep the prices relatively the same and increase their profit margin

Not only that but as Toyota have one of the most extensive and divers ranges of any manufacturer the downturn might effect them in say the luxury car sector but they should still be able to manage quite well if not improve in the entry level sector.
That is shtey should be able to to better than a car company with just one or two select vehicles in on e particular sector – like GMC who just do full size Pick Ups

As for my statement about Toyota making another loss next year – it could happen who knows…? Holden could actually make a profit next year who knows…?

There are so many other factors involved which neither Toyota Holden or you have any control over which could effect what happens next year
Mark

Just one person’s opinion. Personally I think he’s talking rubbish. Toyota have a large market share in the US, their models are popular and sell well. No reason why they cannot be profitable. On a recent trip to Florida all I saw were Camries (and to a lesser extent, Avalons).
Chris

Florida, Old People, Camry’s. Hmmm
Lukaas

Not surprising at all…. everyone has taken a hit and the manufacturers with “new” models out are selling higher rates at this time, but still crap numbers in comparison to previous years.

I’ve said it a million times, in a few years watch Toyota enter back to the affordable sports car market. Don’t expect it to come to Australia though…. too little of a market. And justifying tens of millions of dollars, resources on a niche market is already very hard. I expect it to hit USA, Japan and maybe Europe. Maybe a tiny chance for it to come to Oz though.

And to Jason who sees Camry’s breaking down on the side of the road… I dunno where you are from, but I rarely rarely see that happen. Boring they are, but assuming you dont treat it like crap, they are reliable indeed.
Wheelnut®™

All cars will break down or suffer mechanical problems of some sort it all depends on how well or how poorly they are treated.. not to mention how well/poorly they are maintained.. be it a Holden a Toyota or even a BMW

Toyotas have a reputation for their [supposed] reliability but that are not know for their Longevity – How many 20+ yo Toyotas do you see on the roads – in original condition?

Toyotas may be more reliable yet when they do have a mechanical problem its usually quite major and expensive to fix.
SteveH

Wheelnut, I still see plenty of 20 year old Camrys and Corollas on the roads. Don’t see too many EA Falcons and VN Commodores though.
Tomas79

Wheelnut®™ Says:
“Toyotas have a reputation for their [supposed] reliability but that are not know for their Longevity – How many 20+ yo Toyotas do you see on the roads – in original condition?”

Way more then Commodore, and Falcons from the same era.
For a commodore or Falcon from the same era to be around, it would have been restored, or some critical done to it!!!

Exactly STEVEH!! The 20+ year old toyota’s are the oldest cars I see on the road frequently…
John

What the hell do old cars got to do with this thread ?

Stop arguing Tomas and SteveH, you sound like a couple of 16 year old girls. All you need is your mate D!ingo and you will be happy little Toyo Trio again.

Topic is that the CEO of Toyota Motor Sales USA, Yoshimi Inaba, said North Americas division is no longer profitable and they make boring cars.So suck it up and accept the truth dudes.
SteveH

John, great comments. Try and re-read all the comments before shooting your mouth off.