Toyota Motor Is Having Trouble

Business Week Magazine
December 4, 2008

The Downturn Makes Toyota Discount Desperately, Too

Overexpansion and plunging sales in North America have brought losses and deep discounts to Toyota Motor.

How do you know the auto industry is really in dire straits? When even mighty Toyota Motor is having trouble. Not only did the Japanese carmaker's U.S. sales plummet 34% in November, but they did so even as the company served up huge discounts. Tearing a page from General Motors' marketing manual, Toyota has been offering 0% financing on 12 models and $5,000 off its Tundra pickup and Sequoia SUV.

Toyota lost $330 million in North America during the quarter that ended Sept. 30. And analysts say those losses could grow in the months ahead.

Toyota has made some moves to build fewer cars. It shut down its two-year-old pickup plant in San Antonio for three months this year and restarted it in November with just one shift. But despite cutting North American production by 20% and importing fewer cars from Japan, Toyota says it has about 73 days' worth of unsold cars and 87 days' worth of trucks on dealer lots. It prefers to have 40 to 60 days' worth.

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http://www.businessweek.com/print/magazine/content/08_50/b4112032124029.htm