Toyota announced Tuesday a global production target of 9. 06 million vehicles for next year, and analysts said it's only a matter of time...
NAGOYA, Japan — Toyota announced Tuesday a global production target of 9.06 million vehicles for next year, and analysts said it’s only a matter of time before the Japanese automaker overtakes struggling U.S. rival General Motors (GM) as the world’s top automaker.
GM stock fell $1.20, or 5.7 percent, to $19.85, its lowest level since October 1987. Over the past 52 weeks, GM shares have been trading in a range of $20.60 to $40.82.
GM also was reeling from a report that it was continuing to lose U.S. market share to Asian rivals in the first 11 days of December. That report, released Monday by the marketing and consulting firm J.D. Power and Associates, showed GM’s U.S. market share down to 21.7 percent, compared with 22.4 percent at this time last year. Toyota’s share was up to 17.1 percent from 15.5 percent last year.
GM isn’t the only U.S. automaker cutting costs. Ford, which reported a third-quarter loss of $284 million, has said it plans to eliminate about 4,000 white-collar jobs in North America early next year as part of a restructuring plan.
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Toyota’s plan, announced by President Katsuaki Watanabe, marks a 10 percent increase from the 8.25 million vehicles Toyota expects to produce this year, and goes neck-and-neck with what GM estimates as its production this year of about 9 million vehicles.
GM does not give full-year production targets but it produced 6.7 million vehicles during the first three quarters of this year and expects to produce 2.36 million vehicles in the final quarter of this year.
Yasuaki Iwamoto, auto analyst with Okasan Securities in Tokyo, says Toyota likely will beat GM in two or three years, if not next year, because Toyota’s momentum for growth is so much stronger than GM’s.
“There’s no mistake — Toyota is headed to the top,” he said.
Toyota, which has built a reputation for reliable cars and superior gas mileage, has been growing at a time when GM has been stumbling, losing $1.6 billion in the third quarter and seeing its market share in North America chipped away by Asian automakers.
GM has announced drastic cost cuts, including trimming 30,000 jobs, or 27 percent of its North American manufacturing jobs, and the closure of 12 facilities by 2008.
One reason for GM’s troubles has been health-care benefits for workers and retirees.
“Even in North America, (Toyota’s) factory labor costs are lower because it pays a bit less for labor and is not encumbered by excessive benefit costs,” said Peter Morici, University of Maryland economist and auto industry expert.
But Watanabe played down Toyota’s apparently imminent No. 1 status.
“We try to prepare our production and sales to respond to customer needs in every region,” he said. “I am not thinking much about whether we will become No. 1 in the world as a result of that.”
Toyota said it expects to sell 8.85 million vehicles worldwide next year, up 9 percent from 8.09 million this year — 2.47 million vehicles in Japan, and 6.38 million abroad.
Koji Endo, auto analyst with Credit Suisse First Boston in Tokyo, praised Toyota’s “positive cycle” of having ample money to invest in facilities and research that in turn allows it to produce cars that appeal to the market and cut costs, leading to even more profits.
“It’s bound to happen either next year or the year after,” Endo said of Toyota’s outstripping GM. “But perhaps there isn’t much point to the question. It doesn’t make much sense to be comparing vehicle production numbers between the world’s most profitable automaker and one that’s on the verge of collapse.”