Japanese automaker Toyota is set to top global automotive sales in 2012 for the first time in two years, with gains in the United States likely to offset losses in China, while rivals Volkswagen and General Motors are fighting a close battle for second place.
IHS Automotive perspective | |
Significance | Japanese automaker Toyota is eyeing a global output of 9.9-million units in 2013 and is poised to reclaim the title of world's biggest automaker in 2012. Meanwhile, rivals Volkswagen and General Motors are fighting a close battle for second place. |
Implications | Toyota is set to top global sales in 2012 for the first time in two years, as gains in the United States could well offset its losses in China. |
Outlook | Toyota's tentative 2013 global output target comes on the back of an expected expansion in the US market but is likely to face the challenge of weak demand at home and in China. |
Toyota Motor is poised to reclaim the title of world's biggest automaker in 2012, while rivals Volkswagen (VW) and General Motors (GM) will compete for second place heading into the final weeks of this calendar year, reports Bloomberg. Toyota is rebounding from Japan's 2011 earthquake/tsunami disaster to take the title from GM, while the fight for second place between VW and GM is expected to go down to the wire, with less than 1% difference between their sales so far. All three companies have gained from the strength of the US light-vehicle market, which is heading for a third straight year of growth following the 2009 collapse and industry bailout. The US auto market is projected to expand again next year, which would match the longest growth period since the end of the Second World War. Rebecca Lindland, an industry analyst with IHS Automotive, said: "Because the US is so large, when we have a double-digit growth, it is going to propel the rest of the world… The gains can mask a myriad of sins elsewhere, because many of the other economies are not exactly setting the world on fire." Based on its counting methods on sales, Toyota led through the first three quarters of this year, with 7.4 million units sold, compared with 6.95 million at GM and 6.90 million at VW, including Porsche. Although more recent global data are not available, Toyota has continued its rebound at home and in the United States through November, with Japanese sales having surged 31% year-on-year (y/y) in the first 11 months, driven by government incentives. GM, the top automaker in the US, has been bolstered by rising sales at home, while VW's sales in China increased 20% y/y through November.
Toyota's global production target for 2013
The Toyota group, including small-car unit Daihatsu and truck-making unit Hino, is considering setting its global production target at around 9.9-million units for 2013, about the same level as this year's all-time high output, sources familiar with the matter said today (19 December), quoted by Kyodo News. The automaker, therefore, will have to shelve a previous plan to achieve annual production of over 10-million units for next year, a milestone yet to be achieved by any global automaker, as it expects sluggish sales in the Chinese market against the backdrop of recently strained Sino-Japanese relations over a territorial dispute. Toyota, nevertheless, expects growth in its car sales in North America and Southeast Asia, according to the sources.
Outlook and implications
Toyota had earlier announced a plan to produce a record 10.05-million vehicles this year, but revised the target downwards in November to 9.89-million units owing to the turmoil because of Japan's territorial dispute with China (see China: 6 November 2012: Toyota slashes Chinese forecast by 200,000) and also due to shrinking demand in Japan following the end of the government's subsidy programme for the purchase of environmentally friendly cars in late September, the effects of which are expected to spill over into 2013 (see Japan: 7 December 2012: Toyota revises domestic sales target for 2013, expects volumes to decline 20% y/y – report). Toyota also revised downwards its parent-only production target for 2013 to 8.7-million units from the earlier announced 8.98-million units amid uncertainties over the situation in China. Of this total, domestic production is expected to drop 10% y/y to around 3.1-million units, while overseas production will likely increase 6% y/y to roughly 5.6-million units as Toyota plans to boost output in Southeast Asia, particularly in Thailand (see Thailand: 9 November 2012: Toyota to boost Thai annual output to 1 mil. units) and Indonesia (see Indonesia: 21 September 2012: Toyota Plans to Triple Indonesian Production). Toyota, however, has reiterated time and again that it intends to stick to its plan of producing at least three-million units in Japan despite the yen's appreciation, which hurts its export profitability, by way of comprehensive restructuring and profit-improvement activities.
Reaching its projected global sales of a record 9.76-million units in 2012 will be difficult for Toyota owing to the situation in China, despite leading global sales in the first nine month of this year (see World: 29 October 2012: Toyota leads global vehicle sales in January–September). That said, the US market, where Toyota sales were up 32% y/y in January–September, could well offset its losses in China. Irrespective of the ranking outcome, all three of the world's top automakers have contributed to a record 2012 in terms of sales, which are expected to top 80-million cars and trucks for the first time as robust US and Japanese purchases offset a European downturn. While the race for the top global automaker is expected to revolve around these three firms in the years to come, the equation might tilt in favour of VW in 2013, when the German automaker will reportedly add 600,000 units of production capacity – as much as GM and Toyota combined – and is expected to gain most from a projected rebound in China. VW has said it will be the global sales leader by 2018. Toyota's tentative 2013 global output target comes on the back of an expected expansion in the US market, but it will likely continue to be challenged by weak demand at home and in China.