TOKYO (Bloomberg) -- Toyota Motor Corp. is facing a Japan problem.
The
company was outsold by General Motors Co. for the first time in six
quarters, as sales in Japan extended their decline after government
incentives for fuel-efficient models expired last year.
Toyota and
its subsidiaries sold 2.48 million vehicles during the quarter nded
June, just shy of the 2.49 million that GM disclosed earlier this month.
Toyota still holds the lead six-month lead over GM.
But
Japan's largest automaker sold 8.4 percent fewer vehicles in its home
market last quarter. Toyota's decline in Japan car sales shows a rare
weak spot for a company that's forecasting its biggest profit in six
years and whose stock has gained 54 percent this year.
Japanese
vehicle sales have fallen steadily since the asset bubble burst in 1989,
with temporary boosts from government subsidies.
"The decline in
Japan will continue," said Jun Nokuo, an analyst with researcher R.L.
Polk & Co. in Tokyo. "It is an aging society and the population is
shrinking. At the same time, the popularity of cars is declining because
public transportation is easy to use."
Toyota's sales in the
first six months of this year dropped 1.2 percent to 4.91 million units.
GM sold 4.85 million vehicles in the first half and Volkswagen
delivered 4.7 million, according to the companies.
10 million
Toyota
has been projecting since late December that sales will climb to almost
10 million units -- a milestone no automaker has ever breached -- in
2013. Japan's largest manufacturer has an ever bigger buffer in the yen,
whose decline has been bolstering the value of Japanese exports.
Toyota,
which reports earnings on Friday, Aug. 2, probably saw profit last
quarter surge 48 percent to the highest in more than five years,
according to the average analyst estimate compiled by Bloomberg.
The
yen has weakened more than 12 percent against the dollar this year and
last week traded at 100 versus the greenback. The Japanese currency may
weaken to 105 in the fourth quarter, according to the median of
estimates compiled by Bloomberg
Separately, Toyota said July 26
it will further expand its Princeton, Ind., auto-assembly plant,
investing $30 million to boost Highlander SUV production by a further
15,000 units a year from 2014. The plant will also hire 200 more
workers, spokeswoman Carri Chandler said.
Price cuts
Nissan
Motor Co., which on July 25 reported a 14 percent increase in profit,
has taken advantage of favorable exchange rates by cutting prices of
seven models in the U.S., including its top-selling Altima sedan.
Nissan
saw sales surge 20 percent last quarter. Toyota has resisted following
Nissan's price cuts and saw its sales in the country rise by 3.7 percent
-- less than half the pace of the industry -- and its U.S. market share
fell to the lowest in five quarters, according to data compiled by
Bloomberg.
At GM, 18 new or refreshed vehicles are being brought
into showrooms this year, transforming its lineup into one of the
market's newest from one of the oldest. One of the earliest new
offerings, the 2014 Impala, was rated by Consumer Reports as the best sedan on the market -- a first for a U.S. automaker in at least 20 years.
The
product push is part of CEO Dan Akerson's efforts to boost North
American profit margins to 10 percent, stem European losses and increase
China sales to 5 million, all by mid-decade. GM's rise to the top of
the global industry capped a week in which the maker of Chevrolet cars
and Ford Motor Co. posted earnings that beat analyst estimates.
China market
In
China, where a territorial dispute led to a consumer backlash that cut
demand for Japanese products last year, Toyota continued to lose market
share to GM and Volkswagen. Toyota's sales climbed 0.6 percent last
quarter, versus GM's 12 percent and Volkswagen's 16 percent, according
to figures reported by the companies.
Demand for Japanese products
in China, the world's largest auto market, is recovering from last year
and Toyota is targeting this year's deliveries to rise to at least
900,000 units, up about 7 percent from 2012.
In Europe, where auto
demand is slumping to its lowest level in two decades, sales of Toyota
and Lexus cars last quarter were little changed from a year earlier,
reaching 215,734 units. That helped the company keep its market share at
about 4.5 percent, according to Toyota.
Toyota, GM
In
2008, Toyota ended GM's 77-year reign as the world's largest automaker,
holding on to the top annual sales spot until 2011, when it surrendered
the title after production was disrupted by natural disasters in Japan
and Thailand.
Sales rebounded in 2012, allowing Toyota to deliver
9.75 million units and regain its global No. 1 title as the recession
receded, while the carmaker added products and was spared from
disruptions from natural disasters.
"The fight between GM, Toyota
and VW will be long and hard fought," said Alec Gutierrez, senior
analyst at Kelley Blue Book. "It will be the manufacturer that is best
able to deliver high quality, affordable, fuel-efficient transportation
to the masses that will ultimately own the global sales race."
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