No Car Company Will Ever Outperform Toyota (TM)

February 6, 2009 by Douglas A. McIntyre

Batmobile512Barry Bonds’ home run record will never be broken. No car company will ever do better than Toyota (TM).

The Japanese company said it would lose $4 billion in the current fiscal and was hit with a downgrade from Moody’s. Those were the rewards for becoming the No.1 automaker in the world.

Toyota (TM) is in the process of cutting its annual production by as much as one million vehicles. After spending three decades becoming a global company with significant market share in every major country in the world, that expansion is back to haunt it, at least for the time being.

Because of Toyota’s quality control, manufacturing prowess, well-regarded brands, and balance sheet, it will emerge from the recession faster than any car company. Toyota has more resources than any of its competition to ramp up production and marketing  to catch the next wave.

Toyota’s troubles speak volumes about whether the US car company bailout will work. The news out of Detroit is that the lack of an Administration-appointed "car czar" who could push the UAW and creditors to give concessions to GM (GM) and Chrysler has slowed the restructuring process. Details of how the firms will operate viable businesses may not be ready in March when they return to Washington for more money.

Until Toyota signals that it is doing better, the bailout of The Big Three is going to cost more money every month.

Douglas A. McIntyre