[vasudeva]

Originally Posted by GTO

Tell you something you won't believe. Toyota withdrew - very abruptly - from the American market in the 60's. Primary reason? Lack of quality. The Toyopet Crown sedan was a disaster for Americas freeway-driving style.

The quote was from 1977 when Toyota and other Japanese had emerged as serious competitors, and not from the unfortunate beginning of the late 1950s.

Yes it was withdrawn because the engine was supposed to overheat, busted at anything over 60 mph and its drivers got abused on US highways because they could not go any faster. It also tilted in the winds when overtaken by other (bigger and same size) vehicles. To be honest, I think this was the major issues alongwith other issues. I think perhaps Toyopet Crown sold in the double digits during its US life. Rather than risking its reputation, Toyota withdrew the car. I have also read that the unsold stock was to be shipped to Japan, but the then Toyota Chairman asked the US guys to dump it into the Pacific instead. Toyota really started achieving success in the mid-1960s with the Corolla, and that was really the start of its success story worldwide.

In 2007 on the occassion of Toyota's 50 years in the US, Automotive News brought out a supplement detailing various events in Toyota's history (not in the US alone). It is a fact sheet but more than that, it makes for very entertaining reading. The above quote was from that only. Let me know if you need it. If you need it, I shall be able to email it next week only (not on my home PC).

Finally, it is not just about Toyota. In the more than 120 years of auto history, one person in 1907 (I think the mag was Motor Age or something) remarked on the European entry into the US. He said that US makers should be beware of the Japanese. This was in 1906 or 07. Why: because he is a keen observer, ready to learn, and could one day be a formidable foe. (can mail you that article also, from I think an article published in Business History, which is published by Harvard).

[sujaylahiri]

I think this is the best thing that could have happened to the big 3. At least they have some actual competition in North American markets.

This is what capitalism (or free market) should be like, the better product sells more.

[Atlblkz06]

I think we all saw this coming. GM needs to restructure and be "reborn" I think.

I'm all for ditching union contracts as well. I went to the factory and saw people doing mundane jobs like putting in 3 bolts - and making $20/hour.

I think 10 of these guys can be replaced with ONE machine - and as long as the machine costs less than 200/hr to run - they're coming out ahead!

[devarshi84]

Looking at the new articles in the papers everyday and the way GM sales to direct customers increasing, GM aint really going to give up. Though the crisis showed up last quarter, GM has been working on it for sometime. I wont blindly say Big Three sell bad cars. That's just very judgemental. It's but natural to have a bad phase in 80 years but GM has improved its quality to be up there with Honda and Toyota. The only brand lacking is Chrysler.

At the same time Toyota will have sleepless nights in maintaining the position with VW right on the heels. They also have a plan in place to be no.1 in the next 5 years or something.

[vasudeva]

Originally Posted by GTO

Tell you something you won't believe. Toyota withdrew - very abruptly - from the American market in the 60's. Primary reason? Lack of quality. The Toyopet Crown sedan was a disaster for Americas freeway-driving style.

Since I now have access to my office PC, here is an interesting bit about Toyopet Crown from Automotive News, 2007:

The Toyopet Crown actually was one of the best of the early imported economy cars, according to four major reviews of the car published in magazines from 1958 to 1960.In the fall of 1959, the most influential automotive journalist of the day, Tom McCahill of Popular Mechanix, tested the Toyopet Crown. His review largely shoots down the official Toyota line that the car was not engineered for the US.While the Toyopet Crown did not offer the same 0-to-60-mph performance as an American car, it was able to match the performance of other imported economy cars that were selling well. McCahill found the Toyopet could pass traffic on the Pennsylvania turnpike at 70 mph. He also said that it "has a better ride than any other imported car selling for less than $2,500." He also praised the car's high-quality chrome and interior.

However, McCahill referred to the Toyopet Crown as "the little slant eye," and the article uses such words as "Jap" and "Nip."

Early Toyota dealer Frank Hawkins kept his distance from the car and from Toyota. Rood remembers the day in 1957 that a local newspaper came to photograph the dealership's signing of its Toyota franchise deal. "Hawkins wouldn't even be in the picture with the Japanese fellow, so I signed the document," Rood says.

Had the Toyopet Crown been British, French or even German and had it been priced closer to its competitors — such as the Morris Minor, Renault Dauphine and VW Beetle — it might have sold better. The Crown's 0-to-60-mph acceleration time of 24 seconds was slow, to be sure. But it was equal to or better than that of other small imported economy cars.

It probably was Toyota's lack of marketing prowess in the United States, combined with the Toyopet Crown's $2,187 price, that really doomed the car. The Toyopet cost $600 to $700 more than British, French and German imports and about the same as the first U.S. compact cars. Toyota had only 45 dealers in early 1959, most of them in California and on the West Coast.

American Motors' Rambler Deluxe Six debuted in the fall of 1958 with a six-cylinder engine and a starting price of $2,047. In 1960, Detroit fired back at the imports with the Chevrolet Corvair, Ford Falcon and Plymouth Valiant. Those cars had bigger engines and better performance. They delivered good fuel economy and sold for the same or less money than the Toyopet Crown.

There was no way the Toyopet could compete. Sales plunged. About 200 cars were unsold. Dead stock. Management decided to ship back all the unsold Crowns to Japan, to Okinawa. Chairman (Taizo) Ishida said, 'Throw them away into the Pacific.' He was so frustrated."


Maybe that frustration was due to Toyota's really trying to make the Toyopet Crown appeal to U.S. buyers. With dollops of chrome trim, upright styling, curved front and rear glass, plush upholstery and suicide rear doors, the car looked like a scaled-down version of something from Detroit.

Tatsuo Hashiguchi was a fresh-faced Toyota service manager when the Toyopet was introduced. He recalls a Toyopet shakedown trip he took with his wife from Los Angeles to Yellowstone National Park in Wyoming. The Toyopet struggled on the long, sloping Arizona highways.

"We'd come to a hill and have to go into low gear. We were driving up those hills at less than 15 miles per hour, and the big trucks would go roaring past, giving us dirty looks," says Hashiguchi.

Hashiguchi, who worked in Toyota's parts department until he retired in 1997, said there also were reliability problems.

"Our motor had three main bearings for a four-cylinder engine, when it should have had five main bearings," he says. "So when you drove it at 50 miles per hour on American roads, it would shake like hell. More than that, the engines busted."

Toyota's U.S. operations were suffering heavy losses, and a decision was made to withdraw the Toyopet Crown and quit the car business in the United States, according to the company's official history. But that didn't happen.Although Toyota did focus on selling Land Cruisers, Toyopet cars were available in the United States after the Toyopet Crown. The next car, in 1962, was the Toyopet Tiara, a redesigned Crown with a bit more horsepower and conventional rear-opening doors. Sales of the Tiara also were abysmal.The Tiara was replaced by a new compact, the Corona, in 1965.

[magesh_kumar]

toyota is also planning to cut down 20% of the output over the last year to around 6 million from 8 million. and they have having loss for the first time in the past 70 years

[vasudeva]

Here are the 2008 rankings of top global auto sellers

According to Automotive News, there was just one change on the 2008 list of the top 10 automakers as ranked by global sales. Chrysler, No. 9 in 2007, fell out of the top 10 to No. 13. Its sales slumped 24.9 percent from 2007 to 2,010,800 units in 2008. That allowed Renault SA to join the top ranks at No. 10. Renault's worldwide sales fell just 4.1 percent, to 2,382,230.

The rankings for 2009 are likely to look quite different. For example GM trailed Toyota by about 1.2 million units in 2008. By the end of 2009, GM will have lost the Saturn, Hummer, Pontiac and Saab brands. Global sales of those brands totaled 720,550 in 2008. GM will still remain No 2 in that case. However, GM's 2009 total may no longer include sales of Opel and Vauxhall. In 2008, Opel and Vauxhall's combined global sales totaled 1,503,100. Take away from GM the global sales of all those brands, and GM would fall to perhaps No. 4 in 2009, behind VW and Ford. VW could then go to No. 2, and given Toyota's expected decline, its lead over VW could decline from 2.7 million in 2008 to perhaps 1-1.5 million in 2009.

By comparison, Fiat could gain because of Opel and Chrysler. For 2008, Fiat-Chrysler total would have ranked fifth in sales. For that matter, Renault and Nissan combined had sales of approximately 6.1 million in 2008. If they were a single company rather than a partnership of two automakers, that would have put Nissan-Renault at No. 4.

In 2008, Hyundai-Kia Automotive Group sales rose 5%. It narrowed the gap with Ford from 2 million in 2007 to 1.2 million in 2008.

[Technocrat]

Wow Hyundai Seems to be moving up at a fast pace.

[vasudeva]

Let us also look at how Suzuki is doing so far in 2009. As of now, it has 4 major markets-India, Japan, Europe, and US. India is the only market in which it has posted a growth in 2009 as can be seen from below.

Other markets have declined both as an overall market and for Suzuki. Japan is anyway a long-term declining market, while Europe and US have declined sharply from 2008. In fact, India is now by far the largest market for Suzuki. In both Europe and India, Suzuki has performed better than the market, either posting somewhat lower declines (as in Europe) or higher increases (as in India). India is not surprising, but Europe is due to people trading down, which is benefiting Suzuki and Hyundai to some extent.

This same factor should have resulted in Suzuki gaining in US. however, that is not the case. In the US, its sales have collapsed, and it is the maker with the largest decline of 60% in Jan-Jun 2009. In June 2009, sales collapsed 78%. Suzuki’s decline in US has been rapid from 100,000 vehicles in 2006 and 2007 to only an expected 40,000 in 2009. This is attributed to shrunken product line up, no marketing, useless captive finance company, and practically invisible among Asian players.

The company has failed to transfer the strength of its brand in other types of vehicles to its cars and crossovers. An owner of Suzuki Auto Center in Texas says `people spend $6,000 on a Suzuki ATV, $12,000 on a Hayabusa (superbike) and $18,000 on a Suzuki outboard. But they question spending $21,000 on an XL-7." A Suzuki official says two-thirds of Suzuki dealers are in the black. But Mark Johnson, a dealership buy-sell consultant in Seattle, says that recent buy-sell transfers of Suzuki stores usually have blue-sky amounts from "zero to the low five figures," meaning dealers don't see much value in the franchise. Blue sky measures a dealership's intangible assets, such as goodwill.

Suzuki has drastically pared its vehicle lineup. The Reno, Forenza and Verona — volume cars of marginal quality built by GM Daewoo Auto & Technology — were deleted at the end of the 2008 model year. Sales of the Suzuki-built SX4 have replaced Reno sales somewhat, but Suzuki dealers are still waiting for the production version of the Kizashi 3 mid-sized sedan concept due later in 2009.

Also production of Suzuki's XL-7 mid-sized SUV has ended at CAMI, a Canadian joint venture with General Motors. Suzuki wasn't selling enough XL-7s to keep capacity high enough. So rather than eke out more units at a loss, production was halted last fall. Those inventories have mostly run out since production ended, and there is no time frame for XL-7 production to resume — or for a replacement vehicle. That leaves the SX4 compact sedan and hatchback and the Grand Vitara crossover as Suzuki's main vehicles. But retail sales of those vehicles have tanked. Suzuki also has cut its reliance on fleet sales. By June 2008, Suzuki had sold 17,000 vehicles to fleets, nearly one-third of all sales. This year, just 4,000 fleet units have been sold till June 09.

Analysts also see unwillingness of banks to finance Suzuki and its own management. For instance, when several Suzuki dealers in Florida folded recently, the company did not split the orphaned new-vehicle inventory among other Suzuki dealers. Instead, the vehicles were dumped into a general local auction. A Nissan dealer snapped them up and sold them as zero-mile used cars for thousands less than sticker — undercutting Suzuki's own dealers. Dealers also are unhappy that an incentive for sales personnel paid by Suzuki has recently been lowered from $300 to $100 per unit sold. That is just one sign of Suzuki's waning marketing support. They have stopped advertising and promotions of any consequence. They are off network TV, and their cable advertising is 7-10 days max. The finance company is useless. They used to buy low but are not financing anybody.

A positive factor for Suzuki is the fact that ending sales of the defect-plagued Daewoo-built vehicles have prompted an instant leap in Suzuki's quality scores. The automaker jumped from 32nd place to ninth place in the 2009 J.D. Power Initial Quality Study, scoring better than Infiniti, BMW and Acura. With the Daewoo-built cars gone, Suzuki also has seen the industry's most-improved residual values in the past year, according to Automotive Lease Guide. However, this improvement is relative. Previously, Suzuki's 36-month residuals had been languishing in the 30 percent range, at the bottom of the industry. Residual values have improved for all small cars, so Suzuki benefits from that as well.

[madhukar_n]

Vasudeva, Fantastic analysis on Suzuki.
I think we should not be surprised if Maruti Suzuki = Suzuki in a few years time. I mean India is the only place where the vehicles should be manufactured and exported to other countries.

[RP_812]

I am not an expert on Automotive engineering like many many people who have talked statistics here. I just drive cars for the sheer thrill of driving , and I have driven many cars over many many kilometers of road and no road , but I still fail to understand the thrill in any of the Suzuki Cars.
I find absolutely no difference in driving an 800 or a SX4.
There maybe a barrage of insults , but this is what I feel about all Suzuki's.

[greatmana2000]

I think volkswagen will rule the automotive industry in a few years time . Volkswagen as an entity and the brands it carries will definitely catapult it to the top spot . The only hitch as of now with volkswagen would be the after sales support ( skoda in india ) .

And I feel volkswagen has a lot more options for each of its cars than toyota or any other car maker . The engines , gearboxes , interiors , etc .

Honda will never ever rule the sales ( they dont even have a credible diesel to sell in Asia and europe )

[rranjith_kum]

Originally Posted by greatmana2000

I think volkswagen will rule the automotive industry in a few years time . Volkswagen as an entity and the brands it carries will definitely catapult it to the top spot . The only hitch as of now with volkswagen would be the after sales support ( skoda in india ) .

And I feel volkswagen has a lot more options for each of its cars than toyota or any other car maker . The engines , gearboxes , interiors , etc .

Well I really love to see that, but then even if they really come to that position they will be short lived. See having a lot of brands may help but in making a car like VW Golf W12. See VW owns top brands like Bugatti and Bentley with may not help with the volumes and ultimately reaching the top position.

Toyota shuts down the first car plant in the entire company history of 72 years. The facility erected in a JV with GM in Fremont, California, known as New United Motor Manufacturing has closed its doors.

[vasudeva]

VW can dream on about world domination. If they have to overtake Toyota, then they will have to succeed in US (not likely), India (not likely), China (can increase somewhat). In the meanwhile, others will just keel over and die like GM and Chrysler.

Regardless of what Winterkorn says, VW can not be No 1 in the next few years with just organic growth. If they takeover someone, then possible.

Even then being no 1 just does not mean anything as GM and Ford have learnt.

[Mpower]

New Toyota CEO is cutting production drastically and being No.1 is not his target at all. VW is clear to overtake.