While there are no indications Toyota Motor Corporation might need the same sort of desperation-driven financial bailout sought by its arch-rival General Motors Corporation, the situation is certainly getting more critical for the Japanese company, which, only last year, became the best-selling automotive manufacturer in the world. The same crisis is also affecting Honda Motor Corporation and Nissan Motor Company. All three of these Japanese giants are shrinking from startling production cuts of 40-50% in February.
The problem is that the automotive world is getting smaller in every market the Japanese Big Three compete in. If the latest projection by the Japanese Automobile Manufacturers Association holds true, that country’s new vehicle sales will hit a 32-year-low when data is tallied up at the end of the current fiscal year, which wraps up on March 31st. For the fiscal year, Japanese sales are off a seemingly modest 8%, but that market has never really recovered from the slump it entered, more than a decade ago, and annual sales are expected to hit just 4.3 million, about half of Japan’s one-time peak.
For decades, Japanese makers like Toyota have shifted focus to export markets, such as North America, but the global slump is taking a steadily worsening toll. For Japan, as a whole, its manufacturers – of everything from clothing to cars to computers – saw exports plunge by half last month. (more…)