Toyota Hopes for 2010 Recovery

After an uncharacteristically harsh year of negative headlines and downward-trending sales, Toyota Motor Corp. is eager to start 2010 with a fresh outlook. The auto maker enjoyed a brief reign as the world's No.1 auto maker in 2009, only to be quickly dethroned by Volkswagen AG. Jim Lentz, president-Toyota Motor Sales U.S.A. Inc., knows the auto maker's stature in the global sales race is less important

After an uncharacteristically harsh year of negative headlines and downward-trending sales, Toyota Motor Corp. is eager to start 2010 with a fresh outlook.

The auto maker enjoyed a brief reign as the world's No.1 auto maker in 2009, only to be quickly dethroned by Volkswagen AG.

Jim Lentz, president-Toyota Motor Sales U.S.A. Inc., knows the auto maker's stature in the global sales race is less important than its perception in the marketplace.

“What's most important is we don't become distracted by current events and take our focus away from wanting to be the No.1 brand in the eyes of the consumer,” Lentz says.

The negatives may seem overwhelming at the moment: monthly sales plunging more steeply than those of certain fellow Japanese auto makers; its first U.S. plant closure (New United Motor Mfg. Inc.); and a devastating recall over floor mats following a deadly crash of a Lexus in San Diego in August.

Lentz understands his company's fundamentals are sound. Financially, Toyota is doing better than most. Its manufacturing plants remain the envy of the global industry; and the product is well-regarded in the marketplace and relatively fresh, although still incorporating fullsize pickups and SUVS as consumer preferences are shifting to smaller vehicles.

Next year, Toyota will roll out 10 new or refreshed models in the U.S., including the '11 Sienna minivan. Although once downbeat about the minivan market, Lentz now believes there will be enough volume to go around for those auto makers staying in the segment.

In addition to new product to bolster sales, Lentz anticipates a slight rebound in Toyota's major West Coast markets of California, Nevada, and Arizona.

“I don't know if you're going to be able to call those markets in recovery. They will be recovering, and as a result you'll get a pretty big boost.”

Toyota forecasts an industry seasonally adjusted annual sales rate improving to the mid-11-million-unit range in 2010, up about 1 million units from what it expected this year.

Despite opportunities to grab vacant or soon-to-be-closing stores from other brands, Lentz says Toyota's dealer count is exactly as it should be, at 1,232 units, a decline of two or three from last year.

However, the withdrawal of some brands from certain markets does present the opportunity to Toyota's dealers to expand their service operations and buy additional property in markets where the company already is represented.

“There were dealers kind of scratching their heads on where they were going to come up with properties and facilities in the past, and there have been some opportunities opened up for them as a result of this,” Lentz says.

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