Toyota, outsold by GM in Q2, faces long-term slump in Japan Read more: http://www.autonews.com/article/20130728/GLOBAL/307289993#ixzz2aPqHzVzR Follow us: @Automotive_News on Twitter | AutoNews on Facebook

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."

SOURCE:
Alain Japan

Toyota Used Car Exporters in Japan

Tokyo: 

Toyota Motor Corp. looked set to retain its title as the world’s top-selling car maker in the first half of this year, company figures showed on Friday, outpacing General Motors Co. and Volkswagen AG as it boosted overseas sales to a record high.

The Japanese auto maker said its groupwide global sales for the first six months totaled 4.911 million vehicles. That was down 1.1% from a year earlier due to weaker Japan sales following the end of green car subsidies, but sales in the US, its biggest market, were strong.

By comparison, General Motor’s January-June sales rose 4% to more than 4.85 million cars and light trucks, while Volkswagen’s climbed 5.5% to 4.7 million vehicles, those companies reported earlier this month.

Volkswagen’s sales figure, however, excludes its Scania and MAN brands. Scania sold 37,980 vehicles during the same period, while the MAN figure will be released later this month. In recent years, MAN has sold around 60,000 to 70,000 vehicles in the first half of the year.

Toyota regained the global sales crown last year after slipping to third place behind GM and Volkswagen in 2011, when its supply chain was hit by naturals disasters in Japan and Thailand and after a series of recalls tarnished its reputation for quality. Previously, it had been on top from 2008 through 2010.

Toyota’s group-wide total includes sales at Daihatsu Motor Co Ltd and Hino Motors Ltd.

Toyota, based in central Japan, last year made about 40% of its vehicles in Japan and exported nearly 60% of that. It has benefited from a weaker yen that allows it to export cars more profitably.

Toyota, which is scheduled to announce quarterly results on 2 August, is expected to post an 84% year-on-year rise in operating profit to 649 billion yen ($6.5 billion) and an operating profit margin of 10.8%, according to analyst forecasts. The results would likely outpace those of No. 2 Japanese automaker Nissan Motor Co. and third-ranked Honda Motor Co.

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Alain JapanToyota Used Car Exporters in Japan

Used car sales fall 2.9% in Jan - June

Domestic used vehicle sales fell 2.9 percent from a year before to 2.03 million units in the January-June period, industry data showed Wednesday.

Sales marked the first decline in two years for the first-half period, the Japan Automobile Dealers Association said.

The decline stemmed from a shortage of inventories in line with a decrease in new vehicle sales following the end of a government subsidy program for fuel-efficient cars in September, association officials said.

In addition, an increasing number of trade-in vehicles have been too old to be sold as used vehicles, the officials said.

SOURCE:

Alain Japan

Toyota, facing lingering anti-Japan tensions, mulls shift in China strategy

BEIJING (Reuters) -- Toyota and its dealers are quietly maneuvering to allay risks from periodic eruptions of anti-Japan sentiment in China, even as recent sales data suggest a slow but steady recovery for Japanese automakers since the latest flare-up last year.

China sales for Toyota Motor Corp. and other Japanese car makers tumbled after a territorial dispute between Beijing and Tokyo sparked an outbreak of anti-Japanese protests in September last year.

Trade and diplomatic ties between Asia's two biggest economies are prone to sporadic disruptions, a legacy of the lingering bitterness from Japan's wartime occupation of large parts of northeastern China.

As a result, some executives at Toyota's China unit are considering the merit of focusing its sales effort, at least in the shorter term, on southern China, where anti-Japanese sentiment is historically weaker.

In the south, sales of Japanese cars have all but recovered to pre-September levels "as if nothing happened", a senior Toyota executive in Beijing said.

"Our feeling is why spend money to overcome the bias against Japanese products in northern China?" the executive said.

"We could get more bang out of that same money by focusing on southern China where we already have a (relatively) good will towards Toyota and Lexus."

Asked about such a move, a Toyota spokesman said it was focusing on the quality of it products.

"The bottom line: the best thing for us as an auto maker to do in China, and in any market for that matter, is to keep making efforts to come up as quickly as possible with the kind of cars consumers deem desirable and want to embrace," Toyota's Beijing-based spokesman, Takanori Yokoi, said

Source:

Alain Japan

The smallest cars they make are very big in Japan

Tokyo: Japanese automakers such as Honda Motor Co. and the Toyota-Daihatsu group have a problem: the smallest cars they make are very big in Japan—and only Japan.

Consider Honda’s hi-tech N BOX, a four-passenger microcar that combines some of the utility features of a much larger SUV—the seats roll down to load a bicycle or two—and the fuel-sipping economy of a tiny, 660-cc engine.

For the first half of 2013, the zippy N BOX was the best-selling car in Japan’s popular vehicle category that now represents almost 40% of vehicles on the road.

But outside Japan, the concept of the so-called kei car, a term derived from the Japanese word light, is mostly unknown. Now that could change. The Japanese auto giants are considering exporting the technology to emerging market countries.

“We have fairly low-priced cars in those markets already, but in India and markets like Indonesia, we need even smaller, even more affordable cars,” Honda’s chief spokesman Masaya Nagai said.

Rising fuel costs and a fast growing middle class in the world’s second and fourth most populous states make them likely to be the first microcar customers.

As a first step, companies such as Honda have designed their kei cars—the kei is pronounced like the letter “k”—in a way that makes its easier to produce them overseas.

“We spent a long time nurturing the kei car technology in Japan, and we think it has the potential to be useful not only in developed markets but also in emerging markets,” Honda’s chief executive officer Takanobu Ito told reporters in June.

Honda is not alone.

Toyota Motor Corp. is using technology from its affiliate Daihatsu Motor Co., a kei-car specialist, to develop minicars for Indonesia.

Mitsbubishi Motors Corp. is looking at selling kei-concept cars in Africa, where president Osamu Masuko plans to attend a distributors’ conference this month. Nissan’s chief operating officer Toshiyuki Shiga also said last month that kei cars have a potential of going global.

While few Japanese carmakers have tried to popularize microcars outside of Japan, there are exceptions.

Suzuki Motor Corp. and Daihatsu have targeted India and Southeast Asia since the early 1980s, building a credible presence, although their technology differs from that used to build Honda’s kei.

More recently, General Motors Co. and its Chinese affiliate Wuling have been making an aggressive push for micro minivans in China. Their next bet is India.

Honda believes its advanced microcar technology and the favourable marketing conditions in India and Indonesia mean that the time is right to export the kei concept.

Joost Geginat, an auto market expert with Roland Berger consultancy in Singapore, predicts Japanese companies will invest a total $1.8 billion to produce kei-concept cars in Indonesia.

Micros in macro race

 

Now the race in the microcar market is heating up. Honda, Japan’s third largest automaker most famous for its Civic and Accord cars, is betting on small cars to meet its aggressive target of selling six million vehicles globally a year by March 2017 from current sales of around four million.

To do so, Honda aims to double sales in emerging markets to account for half of total vehicle sales, and its kei car technology could play a key role in that.

Indonesia, where over a million cars were sold last year, is one such market. Last month, Jakarta rolled back fuel subsidies, raising motor fuel prices by an average of 33%. At around the same time, Indonesia signed into law a Low Cost Green Car (LCGC) programme to promote small cars such as the kei, though it is on hold pending review.

Geginat says Toyota, Daihatsu, Suzuki and Honda could roll out a combined 500,000 LCGCs, valued at under at $10,000 each, a year once the new law is in place.

Honda is looking at taking the microcar technology to Indonesia and neighbouring Malaysia, Hiroshi Takemura, who oversees Honda’s small car operations, told Reuters last month.

The company has designed its N BOX to share certain structures with the Fit, Honda’s global compact car also known as the Jazz, meaning the two cars can be manufactured on the same line, said Yoshiyuki Matsumoto, Honda’s managing officer.

Honda currently builds the Fit or Jazz at 10 plants around the world, including Indonesia and Thailand.

One challenge for Honda and other Japanese automakers is pricing. Honda’s N BOX starts from around $12,500, slightly more expensive than the outgoing model of the Fit that starts from about $12,200.

To produce a sub $10,000 no-frills car in Indonesia, features like the turbocharger, vehicle assist system and airbags may have to go, and an old-fashioned key used to start the car instead of an electronic smart key.

Source:
Alain Japan

Japanese automakers, rebounding from an earthquake and aided by a weakening yen

Japanese automakers, rebounding from an earthquake and aided by a weakening yen, cranked up U.S. vehicle production by 36 percent last year while boosting imports from Japan by 19 percent.

Japanese automakers built 3.3 million cars and trucks in the U.S. last year, up from 2.4 million in 2011, according to new data from the Japan Automobile Manufacturers Association, a Tokyo-based trade group representing that country's major carmakers.

That was the most since 2007, when Japanese automakers produced 3.5 million vehicles in the United States, JAMA said.

As U.S. auto sales reached their highest level last year since 2007, Japanese automakers boosted their U.S. market share to 36.9 percent, from 34.9 percent in 2011.

Toyota Motor Corp., Honda Motor Co. and other Japanese automakers rebounded from Japan's 2011 earthquake and tsunami that crippled output, cutting off critical parts needed to produce vehicles.

"We're finally seeing recovery from the recession as well as the earthquake and tsunami," said Ron Bookbinder, general director of JAMA USA. "As long as the U.S. economy and U.S. vehicle demand hold up, U.S. production should continue to rise."

Japanese automakers are also benefiting from a yen that has weakened by 19 percent against the dollar since Oct. 31, when Prime Minister Shinzo Abe began a campaign to lower Japan's currency to stimulate the economy. That gives Japanese automakers an extra $1,500 to $2,000 per car and reduces the cost of production in Japan, according to Morgan Stanley.

Imports rise

Auto imports from Japan rose to 1.7 million vehicles last year, from 1.4 million in 2011, according to JAMA. That was the highest since 2008, when Japanese automakers imported 2.1 million cars and trucks into the United States, JAMA said.

The weaker yen also lowers Japanese automakers manufacturing costs in the United States because their cars contain so much content from Japan, said Adam Jonas, an analyst for Morgan Stanley.

He calculates Japanese autos sold in the U.S. contain about 44 percent of Japan-made parts.

"The yen doesn't sell cars, but it deals you a good hand," said Jonas, who just returned from meeting with automakers in Japan. "What sells cars is how the Japanese share the yen with consumers, either in the form of a lower price or a better car at a similar price."

Nissan Motor Co.'s U.S. sales surged 25 percent in May, triple the industrywide gain, after it cut prices on seven models. Honda is introducing a redesigned 2014 Acura MDX with $4,000 in additional features, yet that model's price is only $1,710 higher, Jonas said.

'Gain share'

"The Japanese do want to gain share here," said Jonas, who forecasts Japanese automakers share of the U.S. market will grow to 40 percent next year from 39 percent this year. "They know that Abe's got their back. He's not going to let them down. They're not going back to a strong yen because he's got to save the economy."

Ford Motor Co. CEO Alan Mulally last week told Bloomberg Television that Japan is "absolutely" manipulating its currency to give its domestic companies an unfair advantage.

"With the currency manipulation, we just have to get back to the place where the currencies are set by the markets and the free trade agreements really are free trade agreements," Mulally said on Bloomberg TV June 20.

JAMA's Bookbinder declined to comment on the yen's effect on Japanese production.

 John Mendel, Honda's U.S. sales chief, said the yen-effect is overestimated.

"I'm not going to say it's much ado about nothing," Mendel said in an interview. "But it certainly is not a game changer for American Honda because 90 percent of what we sell here, we build here."

Exports from Japanese automakers' U.S. plants reached a record last year of 335,680 vehicles, up 29 percent from 259,908 in 2011, JAMA said. Most of those cars and trucks go to Canada, JAMA said. 

Source:

www.alainjapan.comAlain Japan

The U.S. version of Honda Fit

Going local

The U.S. version of the standard Fit and its crossover variant will be sourced from Honda's new assembly plant in Celaya, Mexico. That factory goes online in spring 2014. Honda expects the plant to produce 200,000 Fits and Fit crossovers for the North America annually.

Globally, the gasoline-powered Fit will be offered with a 1.3-liter port-injection or 1.5-liter direct-injection version of Honda's new Earth Dreams engine, combined with the company's new Earth Dreams continuously variable transmission. The United States is expected to get only the bigger powerplant. Both engines will be offered with a manual transmission in some markets.

The hybrid gets a 1.5-liter, Atkinson-cycle engine with a seven-speed dual clutch transmission. Electric power comes from a 22-kilowatt electric motor and lithium ion battery.

The gasoline-powered Fit sold just 25,541 units in the first six months of 2013, up 5 percent from the year before.

And Honda's U.S. hybrids tallied a paltry 9,011 units sold through June, down from 10,712 vehicles in the same period of 2012.

Targeting Toyota

The new hybrid Fit hatchback achieves fuel economy of 36.4 kilometers per liter, or 86 mpg, under Japan's testing regime. That marks a 30 percent improvement over the hybrid version of the current Fit, which sells big in Japan but never made it to North America.

Those fuel economy figures don't translate directly into U.S. EPA ratings because the testing cycle differs in Japan.

But the Fit's Japanese rating edges the 35.4 kilometers per liter, or 83 mpg, rating for the Prius C here. The Prius C, known as the Aqua in Japan, was this country's second-best selling car for the first half of 2013, trailing only the standard Toyota Prius hatchback.

The new Fit has not yet received an EPA fuel economy rating. But fuel savings from Honda's new small-hybrid system are big enough to warrant its U.S. introduction, Jiro Yamaguchi, managing officer in charge of global vehicle development, said at a recent test drive event for the Fit five-door at Honda's Hokkaido proving ground in northern Japan.

"I was not that confident with the previous model, but this model would absolutely sell well in America," Yamaguchi said.

Launch timing has not been decided. But Yamaguchi said hybrid variants likely will be introduced around the time that the standard gasoline version goes on the market, by next summer.

Source:

Alain Japan