Back in the 1970s, workers at Toyota Motor Corp. were taught to never turn down an order because good times couldn’t be counted on to last forever. These days, Toyota cars are in such demand workers are exhausted just keeping up.
“My mentors didn’t teach me how to solve this problem,” President Fujio Cho said, adding that he looks forward to confronting them at the Gates of Heaven about today’s challenges, including ways to spend money as good corporate citizens — not just rake in profits.
“But I already know what they’re going to say. They’re going to say, ‘You idiot, go figure it out yourself,’ ” Cho said recently in Tokyo as he received the 2004 Asian Business Leader of the Year award from Fortune magazine.
The usually unpretentious Cho, who is being succeeded by another Toyota veteran later this year, was in a bit of a gloating mood — and with good reason: Toyota is on a roll.
Toyota achieved an important milestone in 2003 by overtaking Ford Motor Co. of the United States as the world’s No. 2 automaker in annual global vehicle sales.
Toyota held onto the No. 2 position last year. Although it’s still early in the year and Toyota is not without its share of risks, it’s expected to do the same in 2005 and probably the year after.
Toyota, which is targeting a 15 percent global market share sometime after 2010, may even overtake General Motors Corp. as the world’s top automaker.
“Over the last several years, Toyota has been carrying out its strategy surely, rising one step at a time,” said Nobuaki Yanachi, auto analyst at UFJ Tsubasa Securities Co. in Tokyo. “It’s in a stage now when it’s preparing for its next big jump.”
Last year, Toyota sold 7.52 million vehicles around the world, including its truck subsidiary Hino Motors Ltd. and Daihatsu Motor Co., which makes tiny cars. Ford sold 6.80 million vehicles in 2004.
In 2003, Toyota’s worldwide sales totaled 6.78 million vehicles, including Hino and Daihatsu, while Ford’s sales stood at 6.72 million vehicles.
The Ford tally includes Lincoln, Mercury, Aston Martin, Volvo, Jaguar and Land Rover, but it does not include sales for Mazda Motor Corp., which is 33.4 percent owned by Ford.
At this pace, Toyota could overtake Ford on its own, even without Daihatsu and Hino. Toyota alone sold 6.07 million vehicles in 2003, and 6.71 million vehicles in 2004.
General Motors is still the world’s No. 1 automaker, producing 9.1 million vehicles in 2004, up from 8.8 million in 2003.
Toyota has also consistently racked up solid profits in its core auto business. Toyota does not give group profit forecasts, but it earned 1.16 trillion yen in the fiscal year that ended last March 31, a record high for the company.
Ford earned $3.5 billion in 2004, a dramatic increase from a profit of $495 million in 2003, but a result due largely to record earnings at its finance and credit business.
Ford executives, including Chairman Bill Ford, have repeatedly said achieving sales, quality and other goals and maintaining profitability are more important than worldwide volume rankings.
Still, according to most forecasts, Ford will probably continue to lose ground in North American sales to Toyota and other Asian brands — a change Ford might downplay but reflects the erosion of U.S. automakers’ dominance of an industry they’ve led since its inception.
The growth for the Asian makes, analysts say, can be attributed in part to reputations for quality as well as new products — including Toyota’s Scion brand, which targets younger buyers, and the Nissan Titan, that maker’s first entry in the full-size pickup category.
GM, Ford and Chrysler ended 2004 with a total U.S. market share of 63.1 percent, including foreign brands, including GM’s Saab and Ford’s Volvo, according to forecasting firm CSM Worldwide. By the end of 2005, CSM sees that figure declining to 61.6 percent.
Meantime, Toyota, Nissan and Honda grabbed 26.3 percent of the U.S. market last year, with CSM forecasting it will grow to 27.5 percent by year’s end.
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