Toyota Motor Corp. (NYSE: TM) has no interest in elbowing its way to the number one spot among auto manufacturers in terms of unit sales. That means it will not chase General Motors Co. (NYSE: GM) or Volkswagen to the top of the ladder. Profits over revenue, a key manager said.
According to an Automotive News transcript, Toyota Executive Vice President Didier Leroy said:
Toyota could buy another one, two or three companies to be the world’s No. 1 automaker again, but chasing volume for the sake of being No. 1 is pointless. Toyota had consistently sold over 10 million units a year, so we have scale. And customers buy products and brands, not a position in the automaker ranking.
What Leroy did not mention is that Volkswagen, Toyota and GM have never used their number one status as a marketing tool as they have traded places for the top spot over the years.
However, the aces Toyota has could push it into the top spot anyway. Its sales in the United States are often larger than those of Ford Motor Co. (NYSE: F). Toyota is the largest car company in Japan. It also has a healthy share of both the European and Chinese markets. Toyota has built a reputation for quality that other global manufacturers have not been able to match. And its luxury car division, Lexus, has been a juggernaut, in a highly competitive field that includes Mercedes, BMW and Audi.
Toyota’s position in global sales will rely on its bets on future technology, particularly self-driving and electric cars. Leroy said Toyota will be in these sectors, but not at the cost of ongoing profitability:
When will Toyota launch its first full EV? It will come and you’ll see it when it’s ready. While other automakers circulate detailed PowerPoints of their far future product plans, we unveil a new product only when it’s ready, so our customers can buy it and our dealers can sell it.
At Toyota, we aim for profitable growth, so selling an EV and losing $10,000 per unit as Tesla does is not a sound business model in our view.
An unusually aggressive swipe at Elon Musk’s company, Tesla Inc. (NASDAQ: TSLA). Leroy is not as well known as Musk, but he aims to make more money, at least on the bottom line.