A Business Update from John Birchall
The Ford Motor Co recently announced that its U.S. sales rose 24 percent in January, the very month in which Toyota recalled some of its top-selling vehicles.
Ford, the first of the major carmaker to report U.S. sales, said its sales of cars and light trucks to fleet customers including rental car companies had more than doubled from a year earlier.
Ford, General Motors Co and Hyundai Motor Co all seem to have taken market share from Toyota customers with new incentive offers at the end of January, just as the world’s largest seller of cars saw their sales go into a steep decline.
In turn Toyota is expected to announce a sharp drop in own sales for January after it shut down sales of its most popular vehicles, including North American-built Camrys and Corollas, amid a recall of 2.3 million vehicles tied to faulty accelerator pedals. This trend was only compounded when they also announced the recall of the Prius with brake problems.
The problems of Toyota come as Ford, now No. 3 in the U.S. market behind Toyota estimated that its U.S. market share has gone up by 16 percent in January.
When a similar situation arose amongst general Motors vehicles in the 1980’s it them over a decade to re-build market share.
Though a decline in US retail sales in January was recorded it was offset by a strong rebound in fleet sales, which fell sharply last year after financing became difficult to get and businesses stopped spending in the wake of the U.S. banking bailout.
Source: adapted from data made available by Wall Street Journal.
Some analysts are predicting that Toyota's market share will drop to 14.7%, its lowest point since March of 2006. Sales are expected to plunge 45% from December and 11.9% from January a year ago. In both cases, that's worse than any other major carmaker.
So, just how will the once mighty Toyota Car Company, founded on reliable vehicles re-built trust and market share?
Answers please!