Toyota to spend $1 billion to lift U.S. sales
Toyota (TM) was the fastest growing big car company in the U.S. for years. It routinely took market share from domestic car companies like GM and Chrysler, and held off other Asian rivals to remain the number one import in America.
Toyota now has about 16 percent of the American market for cars and light trucks, having fallen behind market leader GM which claims about 19 percent. But, as sales turned sharply down in 2009, Toyota's sales fell just as much as most domestic manufacturers, and upstarts like Hyundai began to do well.
Toyota plans to spend $1 billion in the U.S. to revive its sales, according to news originally reported inThe Wall Street Journal. According to the paper, "Toyota executives vowed to go 'pedal to the metal' in the fourth quarter, using financial strength to drive sales as the U.S. economy appears to be recovering."
Toyota does have significant advantages that it can exploit to improve its U.S. position. For example, it is now the largest car company in the world, having surpassed GM; that gives it scale in terms of maintaining production facilities. Toyota's balance sheet is stronger than any other large car firm's; that allows it to spend $1 billion which most of its competitors cannot afford. It also has a model line that is as broad, if not broader, than any other car firm selling products in the U.S.
Toyota's other huge advantage is its perceived lead in the hybrid market due to its Prius line. As alternative energy cars gain sales, the Japanese company can promote the Prius as the most widely distributed hybrid in the world, and one which is more advanced technologically than any of its competitors.
A billion dollars is a lot of money. Toyota wants its growth back in the US, and it appears to be in an excellent position to reach that goal.
Douglas A. McIntyre is an editor at 24/7 Wall St.