Despite a reduction in short-term expectations, Toyota is making efforts to improve its fortunes by taking steps to change its plans for some of its mature markets, while it is making further moves to develop in markets where it is not yet fully established, an analyst said on Thursday.
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Global Insight auto analyst Ian Fletcher noted that Toyota had revised its forecast for next year down 6.7%, including sales of the Daihatsu minicar and Hino truck brands, from 10.4m units to 9.7m units.
Sales in North America are seen at 2.7m units next year instead of the 3.0m, Japan is downgraded from 2.4m units to 2.25m units and sales are seen down to 1.3m units instead of 1.5m. Asian outlook has been lowered from 1.9m units to 1.8m units but expectations for the rest of the world, including Latin America, are up from 1.65m units to 1.7m units.
“Toyota’s announcement was not wholly unexpected as last month it announced that it had lowered its sales target for the current year, from 9.85m units to 9.5m units, largely as a result of downturns in many of the same markets expected to be hit in 2009,” Fletcher said in a research note.
“These include its domestic market, which continues to be hit as consumers remain reluctant to spend money on anything other than new niche models, while North American and western European growth is being undermined by the depressed regional economies.
“However, as for 2008, Toyota still expects some overall year-on-year (y/y) growth in sales next year, currently forecast at 2.1% y/y. Global Insight predicts that overall global sales could increase at a slightly higher rate than this next year thanks to increases for local automakers in developing markets, and as a result Toyota could well witness a decline in its global market share for the first time in years.”
He said there were still some bright spots.
“The company should continue to do well in both the Chinese and Russian markets, and it is looking to tackle many of the problems it is currently facing, some of which have been of its own making, such as its decision to invest so much in the pick-up and sport utility vehicle (SUV) market in North America.
“It recently announced that it had changed the purpose of its new plant in Mississippi (United States) to reflect the changing demands of customers, who now want its more fuel-efficient Prius models rather than its body-on-frame ‘gas guzzlers’.
“In Europe, the company is said to have 18 new models awaiting launch, including the A-segment iQ, a car that is likely to appeal to the cost-conscious buyer as fuel costs rise and tax schemes are introduced based on vehicle emissions.
“The company will continue to make investments in developing regions over the coming years, including a new small-vehicle plant in India that is set to come onstream in 2010 and which will allow the company to move downmarket into the hotly contested A and B segments in the country.
“It will also increase its stature in the Brazilian market with a new plant near to its existing facility in the country that will begin manufacturing operations in 2011.”
