Toyota Closes In on Number One

Toyota has outlined plans to sell as many as 9.34 million vehicles in 2007, which, if it follows through, would allow it to surpass General Motors as the world's largest automaker.

The new goal comes amid growing signs of the Japanese automaker's continuing success. Toyota surpassed Ford Motor Co. as the world's second largest automaker in annual global vehicle sales in 2003. Ford now expects Toyota to pass it in North American sales in 2007 as well.

Toyota said it sold 8.13 million vehicles worldwide in 2005, and is set to sell about 8.85 million vehicles this year, including sales from subsidiaries truck maker Hino Motors and Daihatsu Motor Co., which makes small cars. Toyota's profit also grew 39 percent in its fiscal first quarter, which ended June 30, to $3.1 billion.

Toyota President Katsuaki Watanabe declined to give a vehicle production target for 2008 but said the number may be slightly higher than the sales figure. "We are aiming for steady growth through strengthening all our operations,'' Watanabe told reporters.

Watanabe also said, in another challenge to competitors struggling to match Toyota's ambitious product plans, that his company would hire 8000 additional engineers worldwide by 2010.

The largest gain in vehicle sales in coming years will come from Asia outside Japan, including China, and they will also continue to grow in North America and Europe, although less dramatically, according to Toyota executives. Vehicle sales in Japan will stay flat, they said.
The ambitious plans in China and the rest of Asia also mean that Toyota now is exposed to more risk if China's economy slows or the military coup in Thailand triggers political unrest, Watanabe said.

Nevertheless, analysts said after the company's press conference that Toyota has clearly benefited from soaring oil prices, which have prompted drivers turn to fuel-efficient cars. Toyota models have a reputation for delivering impressive fuel economy. The Prius hybrid is now so popular its sales have nearly surpassed the tax credit quota set by the U.S. Congress.

(c) www.thecarconnection.com

Mulally has 'secret war room' within Ford

If history serves them right, taking Alan Mulally's advice to "follow me" should be looked at as an opportunity by Ford brass, even when it involves a walk out of the boardroom and down a flight of steps in to his secret "war room".

Insiders are talking about the room, buried deep within the confines of Ford's world headquarters in Dearborn, that has walls covered with charts, graphs and lists of Ford products and markets that define the road to turn the troubled automaker around.

The recently-appointed CEO also points out that he feels some really good people will leave the company during these gut-wrenching times, but for those who stay the ride back up will be infinitely more exhilarating.

Mullaly may begin to lay out his plans as early as the North American International Auto Show in Detroit next month. Let's hope Ford is ready to battle its way back.

(c) www.autoblog.com

Chrysler Cutting Production To ‘07

Chrysler Group is curbing production at the company's truck and minivan plants in theU.S. and Canada for the balance of the year and into January, DaimlerChrysler officials confirmed Thursday.

Chrysler officials declined to quantify the scope of the cuts but they will lead to production halts and curbs on overtime at a truck and a minivan plant near St. Louis, Mo., as well as the minivan plant in Windsor, Ont. Plants building trucks and sport-utility vehicles --Detroit, Warren, Mich., and Newark, Del.-- also will be affected by the cutbacks.

General Motors and Ford Motor Co. had slowed down production of trucks and SUVs earlier this year but Chrysler executives had been loathe to make similar cuts until the growing inventories of unassigned vehicles led to a $1.5-billion operating loss in the third quarter. Another loss is now expected in the fourth quarter.

Tom LaSorda, Chrysler Group chief executive officer, said, "When you look at dealer inventory levels, which we reported monthly and always have, we've reduced that level from the mid-year by over 100,000 units, with the goal of being in the low 500,000 range by year-end, and I said that before and that's kind of where we're going to be," he said.

"We've got to get the business back to managing production and balancing that with what's going on at the retail level in the marketplace," LaSorda said.

Chrysler dealers have been refusing to take delivery of some vehicles pushed by the Chrysler Group in its quest for more sales. The dispute with dealers over inventories became so rancorous that the Chrysler Group's top marketing executive, Joe Eberhardt, resigned last week to operate a Mercedes-Benz dealership in the United States.

"Clearly we needed to address this issue," said LaSorda. "There was an imbalance between production and the sales rate out in the retail field, and what current inventory that the dealers carried. Obviously, this is a process that we need to review," LaSorda said.

[original post: www.thecarconnection.com]

Chrysler Could Face $2B Loss

Pressure on the Chrysler Group continues to grow as the company struggles with hefty inventories and mounting losses.

DaimlerChrysler AG confirmed Friday that the Chrysler Group will offer dealers and consumers a new round of incentives to reduce inventories of unsold 2006 models despite a modest increase in sales during November.

Steven J. Landry, Chrysler vice president of sales, said that one-third of the company's current inventory of unsold vehicles are 2006 models, which he conceded is a relatively high number. In addition, the company still has several thousand "unassigned" vehicles sitting in storage, he acknowledged. Landry, however, refused to say specifically how many unassigned vehicles were still sitting on dealer lots but he stressed the company expected to eliminate the problem by the end of the year.

Meanwhile, analysts inGermany have stepped up pressure on DaimlerChrysler's supervisory board to spin off the Chrysler Group. Rumors also persist in Germany that VW's Wolfgang Bernhard is on his way back to the U.S. to take over the Chrysler Group.

The big incentives - as high as $7000 on some vehicles - coupled with high labor costs and slower-than-expected sales of new models make it very likely that the Chrysler Group will post another operating loss during the fourth quarter, analysts said.

Laurie Harbour-Felax of the Royal Oak-based Harbour-Felax Group said, "The fourth quarter is going to be a killer." Harbour-Felax estimated that the Chrysler Group has gone from making a profit of $150 a vehicle last year to losing $1144 a vehicle through the first three quarters of 2006.

Another analyst, who asked not to be identified, suggested that the Chrysler Group's losses could reach $2 billion in the fourth quarter.

Harbour-Felax said the losses are putting enormous pressure on Chrysler to launch a major restructuring similar to those already underway at GM and Ford. "They have got to do something," she said.

Sean McAlinden, vice president of research at the Center for Automotive Research in Ann Arbor, said the speculation is that Chrysler could be forced to close three and possibly more plants as part of the restructuring. The company's assembly plants in Newark, Del., and the St. Louis North truck plant as well as the Detroit Axle plant could all be on the chopping block, said McAlinden. He suggested Chrysler may have to eliminate as many as 10,000 jobs.

Mike Aberlich, Daimler-Chrysler spokesman, said seven separate studies, covering every facet of the Chrysler Group's operation, are now underway. The results are to be announced in early 2007. "We're studying everything," Aberlich said. "We wouldn't expect anything to break until we complete the studies."

The studies were launched last month shortly after Chrysler reported a $1.5 billion operating loss for the third quarter.

Harbour-Felax said that one of the challenges Chrysler faces is that it had done a lot of things right in the past few years. The product line has been improved substantially and more new products are due out in 2007.

"It's going to be interesting to see what DaimlerChrysler does," she said.

[source: www.thecarconnection.com]