Toyota has been rivaling GM in a global race to become the world's biggest automakers for some time now. One would think they would be secretly relishing the prospect of seeing General Motors go down. But that's not the case at all.
"The damage to our business is certain to be tremendous," Toyota spokesman Hideaki Homma said of a possible Big 3 collapse in the Detroit Free Press article.
Toyota, and other Asian automakers manufacturing in the US, including Kia/Hyundai, Nissan, and Honda, share the same concerns that Ford Motor Company does about a collapse of GM. That if GM fails, many of its suppliers will be forced out of business too. Suppliers that Ford and the Japanese automakers share in common with GM. That could strangle their manufacturing and lead to a domino collapse across the industry.
The Asian automakers manufacturing cars in the US also fear that if GM and Chrysler are forced into bankruptcy, it could precipitate a serious recession, or even a depression that will devastate their businesses.
That is why they are supporting, however tacitly, a bailout of the Detroit Big 3.
Asian automakers have been hit by the massive sales slump in the US just as hard as the domestic brands. Where sales fell 37 percent for the industry as a whole, Toyota saw a 34 percent drop in sales. For Nissan it was 42 percent. Honda sales fell 32 percent.
Toyota recently announced it was delaying the opening of a plant in Mississippi that was slated to build the Prius. Prius sales are off dramatically given the sharp fall in the auto market and the steep drop in gasoline prices.
A collapse of GM could take a decade to actually benefit Toyota's sales lead and market share. The same goes for Nissan and Honda, who would benefit most from the disappearance of GM brands from the market. But those companies aren't willing to risk the serious short-term consequences for that long-term advantage.
muellr
December 17, 2008 4:17 AM
