Toyota Not Profitable in North America

While the mainstream media has focused on the ills of Detroit automakers, Toyota hasn’t been fairing much better in the first half of 2009. In fact, a sales slump has put the company in a precarious position. Yoshimi Inaba, Toyota USA’s CEO, told reporters yesterday that the company is no longer profitable in North America.

The news is a shock strictly in terms of the transparency coming from Toyota, not in terms of the company’s performance. A sales drop of 38% in the first half of 2009 compared with the same period last year would hurt any automaker, and Toyota is not immune to some of the same factors that have hurt GM and Chrysler.

Two factories — a joint venture in California and a recently built but still unstaffed plant in Mississippi — are question marks right now. Inaba said the company will make decisions on both at some point, but at this time capacity certainly doesn’t warrant either.

The executive also mirrored comments made by others in Toyota’s highest ranks, suggesting that future product will be more exciting in terms of styling and performance.

“Toyota is a good car but not exciting,” Inaba said. “Those are the comments we usually [or] always get."

I don’t think anyone’s going to argue with that statement.

Toyota says it's no longer profitable in North America (Detroit News)

Comments

Kind of funny, when you write in any car blog that Toyota is very boring and not exciting, there are hordes of fans who answer back, red with anger... now even the CEO of Toyota says that.

Toyota is a good car but not exciting
Wow, took them long enough to realize the problem. Notably the 2009 Corolla.

I have an 08 Camry XLE Hybrid with plenty of stuff --leather, XM, GPS etc. A fine ride. High 30s MPG. It's a great car. Not fancy, but a joy to drive. Toyota should not stop making them. Better, Detroit should start.
ESF

Ed:

Toyota's lineup is not fairing any better than GM or Ford's right now. Its hard to understand that considering the US media portrays Toyota as invincible and Detroit as totally inept.

Camry sales are down by a huge proportion this year. The Fusion and Malibu are doing better in relation to 2008 sales. I would not be shocked if within the next 5 years the best selling car in the US has an American nameplate. Could be Fusion, Cruze or Focus.

OS
The main reason camry is down so much this year in percentage points is because of the record highs it had last year. It still outsells every other car routinely.

I am not even sure if some of the Toyotas are good cars anymore.
For example, my sys-in-law Camry is 2004 XLE with 65K. Ans she drives very gently. It has check engine on, struts are done, steering has a little cling since the childhood. The car feels 10 years old when driven.
I always argued, that Toyota will go for many years but not problem-free. The shocks getting too soft is running in Camry for years. My uncles 92 model had same issue. You can drive it and say, it is problem-free (like many do) but it is not. Its a problem

With regards to Tony's, we used to have an 87 Tercel. Bought it from a good friend of ours that had all the repair history and such. We bought it from them back in 2003 and it had 100,000 miles on it. I'm very big about doing scheduled maintenance on time with quality parts. Well, at 130,000 miles the little Tercel without any warning just stopped all together. Didn't want to turn on, didn't want to do anything. I checked out everything from the fuel pump to the disputer to the wiring and everything worked fine. so at 130,000 miles, the Toyota that should of kept going was laid to rest. It was our first import and our last. our domestic Chryslers fair much much better. In fact, all but our newest Sebrings have over 200k miles on them and running strong. My Daily Driver Neon has 256,000 miles and feels like it was just driven off the dealership lot. I'm not trying to say Chryslers are the best! but rather even Toyota's can be crap cars and it just so happens that my family has had nothing but good luck with domestics.

Camry sales:
2006 448,445
2007 473,108
2008 436,617
2009 150,242 (through June)

A few monthly sales records but definitely no annual sales record last year. It does sell more than any other car but it's readily apparent that record highs last year are not the main reason for this year's losses. Camry sales are just down.

Toyota is a very conservative company that puts all its resources into quality and continuous improvement. If they're losing money it's because they put too much quality in for the price they charge. I hope they think twice before changing direction. The last thing we need is another Audi, Pontiac Saab or VW, introducing supposedly exciting cars that have lousy reliability. Their current approach has served them well and their leadership in Hybrids is unmatched. The new Prius had 75,000 orders before a single car hit a U.S. showroom.

What a rosy view...losing money because they "put too much quality in for the price they charge."

They are losing money because of their overzealous expansion strategy, arrogantly and ignorantly thinking that if they build it, people will buy it. The mothballed plant in Mississippi and the vastly underutilized plant in San Antonio are prime examples of investments providing no or little return.

They pulled a GM - growing too large, too fast. Maybe this is just a "whoa is me" cry with the hopes of generating sympathy sales. In a way, again, like GM.

Toyota's drop in sales is not only due to the economy. They made boring, reliable cars that were rock-solid in quality and people (like me) bought boring and reliable Toyotas over and over and over again.
Then Toyota became arrogant and let the quality slide and customer service go down the drain, and still thought they could command the market.
People may have paid a premium for "boring" quality, but when the quality went out of the premium price, customers discovered Honda and other manufacturers who provide better quality for a lower price.
What happened to Kaisen?
Toyota need to get back to basics and put the quality back into their product, retrain their arrogant dealers and put the customer back into service.

These are the Toyotas my wife and I have had:

1982 Cressida - 70,000 miles no problems.
1988 Cressida - 110,000 miles no problems.
1992 Camry V6 - rattled and had EFI problems.
1997 Camry V6 - 40,000 miles no problems.
1998 Sienna - 40,000 miles - lots of rattles and minor mechanical and electronic component problems.
2002 Sienna - 40,000 miles - lots of rattles and minor mechanical and electronic component problems. No improvements here.
2002 Avalon - 40,000 miles no problems.
2005 Avalon - The worst car we've ever had. Lots of rattles, transmission problems, clunks and noises, throttle hesitation, paint blobs, misaligned interior panels, rattling heat shields and fog lights. Got rid of it at 6,000 miles.
Toyota obviously have let quality slide.
We now have Honda, Nissan and Hyundai.

ExToyota ,

if you think that you're going to solve quality buying Honda, Nissan and Hyundai - you are wrong!

You might get better quality car if you buy a world car, like Mazda3 or Japanese made Civic. But Nissan... Or Honda... Do you know how many problems Hondas have these days?

I still think, Toyotas can be good. Just buy one made in Japan.