Toyota (NYSE: TM) is the world's largest car company. It makes the most money and has the strongest balance sheet. Over the last decade it has picked up market share in every region of the world and laid waste to The Big Three in their home market. By most calculations, Toyota is the No.2 car seller in the U.S., behind only GM (NYSE: GM) The Japanese auto company has 15% of the American market.
Based on sales though September of this year, Toyota is hurting in the U.S., but is still doing better than most of its competition. Its Prius hybrid is one of the hottest cars on the market. But, with annual vehicles sales in the U.S. dropping to under 14 million units for the year, even Toyota cannot stand the heat.
The big Japanese company has given in to one of the most desperate moves any car company can make. It is giving out "interest free" loans.
The reasoning behind the move seems a bit contrived. According to The Wall Street Journal, "The campaign is aimed at boosting the auto maker's market share at the expense of its struggling Detroit-based rivals." That sounds bogus. If Toyota was doing especially well, it would not need incentives to pick up share.
In reality, Toyota is bleeding in the U.S., along with its rivals.
Douglas A. McIntyre is an editor at 247wallst.com.
Heinz looking good after the second quarter?
Why isn't Bank of America updating its shareholders on CEO situation?
Will Rich Ross really have a positive impact on Disney's movie operations?
Reader Comments (Page 1 of 1)
10-17-2008 @ 2:24PM
mike said...
Yeah, it figures. It's the strongest because
Americans who can't support their own
native companies ( i.e. Ford, GM ) have no
problem handing their money over to foriegn
companies ( and countries ).
Maybe people will wake up when there is no
more American companies and evryone works at McDonalds or Sears.
So, everyone out there that drives a foriegn car, cloths, etc. etc. keep supporting other countries economies.
10-17-2008 @ 3:53PM
Kent said...
I saw a Toyota ad stating buy their cars with no interest. I believe they financed it through the dealerships. Marketshare is the least of their priorities but rather staying profitable and maintain capacity are their concerns like the rest of the auto manufacturers. Since they are cash rich, they can do this and can afford deferred income. I'm sure their main bank - Mitsubishi UFJ Bank, recently Morgan Stanley's major shareholder - are buying up these loans at a discount from TM as well. Lot of ways to skin a cat when times are tough.