April 25, 2024

You are here: Home / Archives for largest automaker

Auto Sales Are Soaring, Propelled by Leases

September 4, 2013 by

In August, automakers reported another month of double-digit increases, selling 1.5 million vehicles, a 17 percent gain over the same month last year. That puts the seasonally adjusted annual industry sales rate at a postrecession high of 16.09 million, up from 14.49 million a year ago.

It is a promising sign for the industry, which has steadily increased production throughout the year to meet rising demand.

“Attractive low lease payments have proven very effective at getting new-car buyers back into the market,” said Jessica Caldwell, a senior analyst at the industry researcher Edmunds.com.

In 2013, leasing has accounted for 26 percent of new-vehicle purchases, according to Edmunds.com. In the years before the recession, leasing accounted for 16 percent to 20 percent, with activity focused on high-end cars and trucks.

General Motors, the nation’s largest automaker, has reaped the rewards. On Wednesday it said that its August sales rose 14.7 percent, its strongest month since September 2008. Ford Motor Company, which has taken a more conservative approach on leasing, posted a rise of 12 percent, and the Chrysler Group, 11.5 percent. For all three companies, the increases were led by a mix of small and midsize cars and trucks.

Auto dealers also point to the revival in leasing, which slowed in the recession as G.M. and Chrysler worked through bankruptcy, as a factor. “Leasing has made an amazing recovery,” said Kirt Frye, president of Sunnyside Automotive Group in Middleburg Heights, Ohio. Higher residual values, thanks to a robust used car market, and record low interest rates mean lower monthly payments for buyers with good credit.

The average monthly lease payment was $408, down from $416 last year, according to Experian Automotive, which analyzes automotive data.

At Sunnyside, leases make up one out of three vehicles sold at the dealership’s Chevrolet, Toyota, Honda and Mitsubishi marquees, Mr. Frye said. That rate is up from one out of five vehicles sold 18 months ago.

The dealership’s luxury Audi brand continues to sell about 60 percent of its vehicles through leases, which is in line with the high-end automaker’s usual business. But the real growth in leasing has come from the $199 monthly payments offered regionally this summer on the Chevrolet Malibu, Honda Accord and Toyota Camry midsize sedans, Mr. Frye said.

“I think that with the $199 price point, people say, ‘Yeah, I see the value there,’ ” Mr. Frye said.

The strategy appears to be working. In the highly competitive market for midsize sedans, Toyota sold 44,713 Camrys last month, a year-over-year increase of 21.8 percent. Honda Accord sales rose 10.8 percent, to 38,559 vehicles. The Chevrolet Malibu trailed larger competitors, selling 16,890 vehicles, but increased monthly sales 16.5 percent.

All four of G.M.’s brands showed double-digit sales increases in August. Cadillac posted the largest growth, with sales rising 38 percent; it was the best monthly showing for the brand since 1989. Buick’s sales jumped 37 percent, the strongest results in a decade. Sales of the automaker’s GMC brand jumped 14 percent, and its Chevrolet brand rose 10 percent.

“Our transformed lineup of cars, trucks and crossovers is performing very, very well,” said Kurt McNeil, G.M.’s vice president of United States sales operations.

Ford reported its best month for retail sales since August 2006. The midsize Fusion had good gains after Ford increased production at its Flat Rock assembly plant. Sales of its small cars, like the Fiesta subcompact and C-Max, rose 30 percent, while sales of the F-Series increased 22 percent.

Article source: http://www.nytimes.com/2013/09/05/business/us-auto-sales-gained-in-double-digits-in-august.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

G.M. Goes to Germany to Reaffirm Support for Opel

April 10, 2013 by Leave a Comment

“We are more convinced than ever that G.M. must have a strong presence in Europe generally and particularly — especially — here in Germany,” Dan Akerson, the chairman of G.M., said Wednesday at Opel headquarters in Rüsselsheim, near Frankfurt.

Several hundred Opel employees crowded onto balconies overlooking an atrium in the office building where Mr. Akerson and other G.M. executives spoke. The workers applauded after Karl-Thomas Neumann, Opel’s fourth chief executive since 2010, vowed that, “Opel is back!”

G.M. is the fourth-largest automaker in the European Union measured by number of cars sold, including the Chevrolet brand. But Opel, sold under the Vauxhall brand in Britain, has been among the manufacturers hardest hit by a relentless downturn in European auto sales that began in 2011.

Sales of Opel and Vauxhall in Europe fell 16 percent in February compared to a year earlier, according to the European Automobile Manufacturers’ Association, while market share slipped to 6.1 percent from 6.4 percent, less than half of what the market leader, Volkswagen, claims.

A few months ago some auto executives were predicting that European sales were close to hitting bottom, but there is no sign of a revival yet. Daimler, the German maker of Mercedes-Benz cars, said Wednesday that it may need to reassess its sales forecasts for 2013 because of the prolonged slump in Europe.

G.M.’s board of directors held a regularly scheduled meeting Wednesday in Rüsselsheim, site of a large Opel factory and design center. It was the first time the board had met in Germany for at least two decades, company representatives said. The board’s presence was probably intended to help correct the widespread impression among Germans that G.M. regarded Opel as an unwanted stepchild.

Mr. Akerson’s appearance had the quality of a state visit. He arrived for a press event in Rüsselsheim with an entourage that included the U.S. ambassador to Germany, Philip D. Murphy, and the prime minister of the state of Hesse, Volker Bouffier. Mr. Akerson will meet Thursday with Ms. Merkel, but neither G.M. nor the chancellor’s office has said what is on the agenda.

Mr. Akerson repeated a promise to invest €4 billion, or $5.2 billion in Europe through 2016. The money will be used to introduce 23 new models and variants of existing models, as well as 13 new engines.

“Opel is paving the way for the biggest turnaround in the history of the European auto industry,” Stephen J. Girsky, vice chairman of G.M., said at the event Wednesday.

But Opel has yet to prove that the latest turnaround attempt will achieve better results than previous efforts. Opel has not reported a profit since the 1990s. Its employees have suffered waves of job cuts and there is currently a wage freeze in effect at German plants. Opel plans to close down vehicle production at a plant in Bochum, Germany, as early as next year.

However, Opel appears, at least, to have finally achieved détente with workers after years of strife that helped tarnish the brand’s image. Wolfgang Schäfer-Klug, chairman of the workers council at Opel, spoke at the event Wednesday, expressing gratitude for what he said was a clear commitment from G.M.

Mr. Bouffier, the state prime minister, noted that many previous turnaround plans failed. “We have often had hopes that a short time later were disappointed,” he said at the event. But he expressed optimism that this time could be different.

“No company invests €4 billion in such a short time unless it believes in the future,” Mr. Bouffier said.

After the speeches were over, the executives and political leaders moved outdoors where they stood in a stiff wind and revealed a slab of concrete that was once part of the Berlin Wall. The graffiti-covered slab will stand in front of the headquarters to encourage workers to overcome obstacles, Opel said.

Article source: http://www.nytimes.com/2013/04/11/business/global/gm-goes-to-germany-to-reaffirm-support-for-opel.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Unemployment in Euro Zone Reaches a Record 12%

April 2, 2013 by Leave a Comment

Spending cuts and tax increases aimed at trimming debt and addressing the financial crises in bailed-out euro zone countries, and the rising rate of joblessness in much of the currency bloc, “are feeding off of each other,” said Mark Cliffe, chief economist at ING Group.

“It’s a bit of a vicious circle,” he said. “Europe is pursuing a policy that is self-evidently failing.”

The euro zone jobless rate rose to 12.0 percent in the first two months of the year, the latest in a series of record highs tracing to late 2011, Eurostat, the statistical agency of the European Union, reported Tuesday.

The agency revised upward the January jobless rate for the euro zone from the previously reported 11.9 percent, itself a record. For the overall European Union, Eurostat said the February jobless rate rose to 10.9 percent from 10.8 percent in January, with more than 26 million people without work across the 27-nation bloc.

Both the jobless rates and the number of unemployed are the highest Eurostat has recorded in data that reach back to 1995, before the creation of the euro.

Europe’s rising unemployment is in increasingly stark contrast to the jobs recovery in the United States, where unemployment in February declined to 7.7 percent, the lowest level since late 2008. The consensus among economists surveyed by Reuters is for the U.S. economy to show a gain of 200,000 jobs in March, after a gain of 236,000 in February. The labor data will be released Friday.

With most European economies either contracting or barely growing, any hiring that is being done by Europe’s companies tends to be taking place elsewhere. Volkswagen, aspiring to become the world’s largest automaker within a few years, is planning to hire 50,000 workers by 2018, raising its total work force to 600,000 employees, according to Bernd Osterloh, the chairman of the German carmaker’s workers council.

But the company wants to add production where the demand is.

“Volkswagen is growing, and is therefore continuing to hire in production,” Mr. Osterloh said in an article that appeared Tuesday in the German daily Handelsblatt. More of the new employees will be added in China than in Europe, he told the newspaper.

The European car market, meanwhile, is at its lowest level in nearly two decades — a side effect of the weak regional economy and the growing number of people without paychecks to spend.

After Greece’s staggering debt problems became apparent in 2009, political leaders and the European Central Bank began demanding that member nations cut government spending and raise taxes to bring their budgets in line with European rules. Those efforts, along with a commitment from the E.C.B. to do whatever is necessary to defend the euro, have helped to ease the near-panic that has gripped the euro zone as recently as last year.

But lower government spending also reduces overall demand for goods and services, weakening the overall economy and the labor market.

In the absence of new measures to stimulate growth at the European and national levels, all attention will be focused Thursday on the governing council of the European Central Bank, which meets in Frankfurt to consider whether to maintain interest rates at their current record low or cut even further. Economists said that the data Tuesday would give the E.C.B. greater scope to cut its main interest rate target from the current 0.75 percent, but that the bank would probably hold its fire for now.

The jobless crisis is hitting hardest in the south of Europe. Eurostat said Greece, with its economy in free fall, had the euro zone’s highest unemployment rate ,at 26.4 percent in December, the latest month for which data are available. Among Greek youth, the jobless rate has hit a staggering level, 58.4 percent.

Spain, where the economy has contracted sharply after the collapse of the global credit bubble, posted the second-highest unemployment rate in the euro zone in February, at 26.3 percent.

Article source: http://www.nytimes.com/2013/04/03/business/global/unemployment-in-euro-zone-reaches-a-record-high-of-12-percent.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

G.M. Regains No. 1 Spot in World Automaking

January 19, 2012 by Leave a Comment

G.M. said Thursday that it sold 9,025,942 vehicles last year, 7.6 percent more than in 2010. Its closest competitor was Volkswagen, whose sales grew 14 percent to 8.156 million, with Toyota falling to third place.

Toyota has not released final sales results for the year but last month it estimated that sales totaled 7.9 million vehicles, a 6 percent drop.

The industry’s sales crown means little beyond bragging rights. But G.M.’s ability to climb back on top, only two years removed from its government rescue and bankruptcy, is certain to bolster morale within the company and strengthen the Obama administration’s argument that its bailout of the industry was worthwhile. G.M. was the world’s largest automaker for more than 70 years before Toyota surpassed it in 2008.

Publicly, at least, G.M. executives have been careful to avoid celebrating amid Toyota’s struggles. Toyota only recently was able to return production levels to normal levels after the earthquake and tsunami in Japan caused major disruptions and parts shortages.

“I want to win in the marketplace, but I want to win against a healthy and vibrant Toyota and Honda,” G.M.’s chief executive, Daniel F. Akerson, said in an interview last year. “Next year, we’ll put the gloves back on, and I’m sure they’ll go right back at us and we’ll go back at them.”

G.M. chose not to highlight its first-place finish Thursday, burying its global sales figures at the bottom of an announcement about its Chevrolet brand selling a record 4.76 million cars and trucks last year.

At the Detroit auto show last week, Mr. Akerson said G.M.’s focus was on increasing profits and margins, but he acknowledged that rising sales were a positive indicator of the company’s progress.

“We’re not going to achieve the financial goals that we want to achieve and have declining market share or declining numbers of units sold,” he told reporters. “It’s one indicator. What’s most important for our owners, our shareholders, is that we produce margins and profits and cash flow.”

G.M. shares were up 0.5 percent, to $24.63 in morning trading Thursday. They have risen about 21 percent so far this month but remain well below the $33 price from G.M.’s initial public offering in November 2010. That is even further below the price needed for the Treasury Department to break even on its investment in the company. The Treasury still owns about 26 percent of G.M.

G.M., whose sales figures include its joint ventures in China, will need to continue increasing its sales to stay on top in the years ahead, if Toyota and Volkswagen are able to meet their ambitious forecasts. Toyota last month said it was aiming to sell 8.48 million vehicles in 2012 and nearly 9 million in 2013, not including some affiliate companies that are included in last year’s 7.9 million figure. Volkswagen is setting a target of 10 million in annual sales by 2018.

Article source: http://feeds.nytimes.com/click.phdo?i=af3237f1034d3371edd0e467ebeb2f89

Filed Under: Business News Tagged With: , ,

New Camry, Spruced Up but Still Free of Flash

August 24, 2011 by Leave a Comment

DEARBORN, Mich. — Toyota unveiled a revamped, lower-priced Camry on Tuesday that it hopes will retain its nearly decade-long dominance as the best-selling car in the United States and help the company regain some of the respect and momentum that has evaporated in recent years.

So important is the new Camry to Toyota’s recovery that the company’s president, Akio Toyoda, traveled to Kentucky so he could drive the first completed car off the assembly line and proclaim “100 percent confidence” in the work of his designers and engineers.

“You might say that this is an opportunity to show the world again what Toyota is all about,” Mr. Toyoda said. He called the Camry, which accounted for 22 percent of Toyota’s sales in the United States last year, “a symbol of Toyota’s success.” It has been the best-selling car in the United States for nine consecutive years.

The 2012 Camry, scheduled to reach dealerships in early October, cannot arrive soon enough for Toyota, which was the world’s largest automaker from 2008 through 2010 but is on pace to rank third this year, behind General Motors and Volkswagen. The company suffered serious damage to a once-impermeable reputation after recalling millions of vehicles to address concerns that some were accelerating out of control. More recently, it has struggled to overcome production disruptions caused by the earthquake and tsunami that struck Japan in March.

In addition, rivals in Detroit and elsewhere have begun building considerably more excitement around their vehicles than Toyota, whose lineup has generally been composed of bland but worry-free models. The new Camry, likewise, is not flashy or groundbreaking but designed to rekindle sentiments among shoppers that Toyota is a dependable choice, analysts said. Camry sales are down 8 percent this year in the United States, and Toyota’s sales over all are down 7 percent.

Toyota is planning the Camry’s largest-ever marketing campaign starting Oct. 17, a months-long blitz that includes having the car featured prominently during the Super Bowl in February, according to Robert S. Carter, a Toyota group vice president. The company introduced the new model on Tuesday on a Hollywood backlot filled with hundreds of performers, broadcasting the ceremony to gatherings in New York, Michigan and the Georgetown, Ky., plant where Mr. Toyoda appeared.

Toyota is seeking to regain some of its lost market share by increasing the car’s fuel economy and dropping the price of some Camry trim levels by as much as $2,000 below the current versions. In the past, Toyota could command higher prices than most competitors because customers were willing to pay more for the quality and reliability its name represented.

But the Camry is up against much stiffer competition than when it first arrived 28 years ago, and even compared with just five years ago when the current generation was introduced. G.M. and the Ford Motor Company, formerly also-rans in the midsize car segment, now sell much more formidable models in the Chevrolet Malibu and Ford Fusion. Sedans from Hyundai and Nissan also have been poaching customers from Toyota.

The new Camry will be the first model to offer Toyota’s new information and entertainment system, called Entune — the type of feature that has helped Ford and others attract new customers.

Toyota said it re-engineered 90 percent of the Camry’s components and that the outside is entirely new, but the car looks similar to its predecessor and remains essentially the same size, albeit with a roomier interior.

“None of the vehicle’s improvements will stop certain enthusiasts from scoffing at the 2012 Toyota Camry and its less-than-revolutionary suit of new clothes, but enthusiasts never sat square in Toyota’s cross hairs to begin with,” said Dan Edmunds, director of vehicle testing at the automotive research Web site Edmunds.com. “As ever, the Camry is aimed at the heart of the market where value, fuel economy, safety, quality and comfort reign supreme.”

Article source: http://feeds.nytimes.com/click.phdo?i=a0b4d2f9d48f6224b3cb0157d9431808

Filed Under: Business News Tagged With: ,

Toyota, Rebounding From Quake, Raises Profit Forecast

August 2, 2011 by Leave a Comment

TOKYO — Citing a quicker than expected recovery from Japan’s earthquake, the Toyota Motor Corporation raised its full-year profit forecast by almost 40 percent Tuesday, although it warned that a strong yen continued to weigh on its bottom line.

Toyota and other Japanese automakers have staged a striking comeback from the March earthquake and tsunami, as parts makers swiftly repaired their factories or switched production lines. The rebound has come even though manufacturers of all sorts are still contending with electrical shortages in Japan because of still-crippled or idled power plants.

Toyota, the world’s largest automaker, said it expected a net profit of 390 billion yen, or $5 billion, for the business year that ends next March. In an earlier postquake forecast, it projected net profit of only 280 billion yen.

The revised estimate came as Toyota posted a 1.1 billion yen net profit for the April-June quarter. That was the period most affected by the magnitude 9 earthquake and tsunami on March 11, damaging factories and severing supply chains.

Toyota plants in Japan were halted for about two weeks after the quake. In April, the automaker started production at all of its domestic factories, but at a sharply reduced capacity.

As a result, the quarter’s profit was a tiny fraction of the 190.4 billion yen Toyota earned in the period a year earlier. But as with other Japanese automakers, the rebound has been stronger than expected.

On Monday, the Honda Motor Company increased its profit forecast for the current fiscal year by 18 percent, to 230 billion yen.

Last week, Nissan, which is much less dependent than Toyota on production in Japan, posted a 85.02 billion-yen profit for the April-to-June quarter that was more than twice the mean estimate of analysts forecasts compiled by Thomson Reuters.

In Toyota’s case, its plants have tried to make up for lost production with extra shifts. The company now expects to lose only 150,000 units in global output for the year because of the quake, compared with an earlier estimate of 450,000 reported by Bloomberg. In the year ending next March, Toyota now expects to produce 7.72 million units, up from a previous forecast of 7.39 million.

Robust sales elsewhere in Asia are contributing to Toyota’s recovery, the company said. In China, sales rose 30 percent in July, rebounding from a plunge of more than 50 percent in the previous three months.

Still, the battered dollar’s drop against the yen, to near-record lows, is eating into Toyota’s profits. A strong yen makes Japanese exports like cars and electronics more expensive overseas, and therefore less competitive. The higher yen also erodes the value of Toyota’s overseas earnings when repatriated into the home currency.

Takahiko Ijichi, a senior managing director, said at a news conference Tuesday that the yen, which has risen more than 11 percent this year against the dollar, was squeezing profits. He said a car sold in the United States, Toyota’s biggest market, would give it several thousand dollars less in gross profit.

“Our history has been defined by a constant battle against currency swings, and it has made us stronger,” Mr. Ijichi said. But a recent rise in the yen to around 76 to the dollar “is beyond the limit,” he said.

Mr. Ijichi said Toyota intended to push aggressively in the United States with new models and bigger incentives to reclaim the market share it lost this year following the natural disaster. For the first six months, Toyota had a 12.8 percent share of the United States market, down from 15.1 percent for the same period last year, according to AutoData.

“By next March, we expect to gain back the market share we had before the quake,” Mr. Ijichi said of the United States.

Toyota shares fell 0.3 percent to 3,160 at the close of trading in Tokyo, before the earnings were announced. The shares have dropped more than 10 percent since the March quake. In midday trading in New York on Tuesday, its American depository receipts were little changed.

 

 

Article source: http://feeds.nytimes.com/click.phdo?i=5e468ac32cc649c9ac5dca73b856c0d4

Filed Under: Business News Tagged With: , ,

U.A.W. Opens Contract Talks With Chrysler

July 25, 2011 by Leave a Comment

AUBURN HILLS, Mich. — Contract talks between Chrysler and the United Automobile Workers began Monday with promises by both sides to reach an agreement that benefits workers, the company and the American taxpayers who bailed out the nation’s third-largest automaker.

The opening of negotiations at Chrysler will be followed this week by similar ceremonies at General Motors and Ford. The current four-year agreements between Detroit’s Big Three and the U.A.W. expire in mid-September.

After years of losses and restructuring culminating in a government bailout and bankruptcy in 2009, Chrysler hopes to continue rebuilding its operations under its new owner, the Italian automaker Fiat.

Company executives said the next contract with the union could not add costs that make the company uncompetitive with foreign automakers. Four years ago, Chrysler estimated that each union worker cost $76 an hour in wages and benefits. After substantial job cuts that have reduced the company’s hourly employees in the United States to 23,000, Chrysler’s typical U.A.W. worker now costs $49 an hour.

“We have a responsibility to ensure we don’t go back to our old formula,” said Al Iacobelli, Chrysler’s vice president of employee relations. “Unfortunately, we have a rich history of not getting it right.”

However, the U.A.W.’s president, Bob King, said that union members deserved to share in Chrysler’s recent successes, which include earning a profit this year and increasing sales in North America.

Mr. King declined to outline specific goals, but said the U.A.W. hoped to add jobs and improve compensation, possibly through a new formula for profit sharing.

“Our focus is to get the best contract for our membership that makes sure they share in the upside,” Mr. King said.

The ceremonial handshake on Monday between the negotiating teams seemed more upbeat than in years past, when contract talks often deteriorated into a tense tug of war. In 2007, the U.A.W. called brief strikes at Chrysler and G.M. before reaching agreements.

But this time, the union is bound by no-strike clauses at G.M. and Chrysler that were conditions of their financial rescue by the Obama administration.

Mr. King said he did not anticipate having to go to binding arbitration with either company, nor to resort to a strike at Ford, the only American automaker to survive without federal assistance.

“It’s our job to get an agreement,” Mr. King said. “We don’t want some third party making decisions that impact our members.”

The federal government committed a total of $12.5 billion to save Chrysler. It has recovered all but $1.3 billion of that sum in a series of transactions that resulted in Fiat’s now owning a 53 percent interest in the American company.

Last week, Fiat paid the Treasury Department a total of $560 million for the remaining shares owned by taxpayers, as well as rights to buy shares held by a health care trust for union retirees.

Although the government has cut its ties to the company, both Chrysler and union negotiators said they considered it vital to reach a contract that justifies the bailout.

“We wouldn’t be standing here today talking about Chrysler without the support of the U.S. taxpayer,” said Scott Garberding, Chrysler’s head of manufacturing.

Mr. King added, “We have a larger responsibility to the American public.”

Article source: http://feeds.nytimes.com/click.phdo?i=4c7b0f7d3435e55c69249551ff1df659

Filed Under: Business News Tagged With: , ,

Toyota Expects 31% Profit Slump

June 11, 2011 by Leave a Comment

The company’s prediction — a 31 percent decline in profit to 280 billion yen, or $3.5 billion, for the year ending in March 2012 — was gloomier than expected. Analysts had been anticipating a profit forecast of about 422 billion yen ($5.3 billion), according to a survey by Bloomberg. In the same period the previous year, Toyota earned 408 billion yen ($5 billion).

But Toyota’s forecast also projected a robust recovery in the coming months as the automaker made headway in mending its supply chain. Though Toyota’s 17 plants in Japan escaped the disaster relatively unscathed, factory lines have been working well below capacity as vital suppliers in the country’s worst-hit areas have raced to restart operations.

Sales for the year are expected to shrink 2 percent to 18.6 trillion yen ($232 billion), the company said.

Toyota reiterated that there would not be a complete recovery in global production until November. Still, there have been signs that output may be bouncing back more quickly than expected. Last month, the automaker said production would begin recovering in June in all regions of the world, a month earlier than previously announced.

Even with a recovery, Toyota is still likely to lose its title as the world’s biggest automaker by sales, to General Motors. It is likely to fall behind Volkswagen as well. Toyota now expects to sell 7.24 million vehicles for the year through March 2012, down from 7.31 million vehicles in the previous year.

A Toyota executive played down the importance of global rankings.

“We don’t see it as necessary to be the largest automaker in the world,” said Satoshi Ozawa, Toyota’s executive vice president.

Toyota executives have tended to avoid tough talk about global market share, especially after the company’s embarrassing spate of recalls in 2009, saying that customer trust and safety were more important.

Also weighing on production at Toyota are electricity shortages in Japan since the accident at the Fukushima Daiichi nuclear plant. Many other nuclear power plants are being kept closed as Japan rethinks its nuclear policy, leading to concerns about a power crisis this summer, when energy use peaks. A nuclear power plant that supplies the region where Toyota’s headquarters and its surrounding factories are located was shut down in May over concerns that it was vulnerable to tsunamis.

Japanese automakers, together with other manufacturers, are being asked to reduce their electricity use by 15 percent this summer. Toyota officials have said they will do their best to cut electricity use, moving some shifts to the weekends to avoid peak times.

On top of the physical disruptions wrought by the earthquake, the strong yen continues to hurt Toyota earnings by blunting its competitiveness overseas and eroding overseas profit when repatriated into the home currency. The dollar has been trading at about 80 yen (99 cents), down from close to 95 yen ($1.19) a year ago.

The higher costs of producing cars in Japan has raised the question of how long Toyota can continue to base so much of its production in its home country.

Even compared with its peers, Toyota stands out in the number of cars it still manufactures in Japan, then ships overseas — an arrangement that has become a drag on its profitability. In 2010, Toyota made 43 percent of its cars in Japan, while Nissan made 28 percent and Honda 27 percent.

Akio Toyoda, Toyota’s president and a member of its founding family, has repeatedly said the company remains committed to keeping production and jobs inside Japan. But Friday, Mr. Ozawa hinted that Mr. Toyoda’s thinking might be changing.

The disruption caused by the earthquake and the strength of the yen had helped to remind Mr. Toyoda recently that his automaker was a global company, not just a Japanese company, Mr. Ozawa said.

“Someone told me the other day that Toyota manufacturing is not owned by Japan. When it’s put like that, I struggle to answer,” Mr. Ozawa quoted Mr. Toyoda as saying.

Article source: http://www.nytimes.com/2011/06/11/business/global/11toyota.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,