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Thread: Why Toyota's Number One

  1. #1
    Vulture of The Western World Eric's Avatar
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    Why Toyota's Number One

    Circa 1977, General Motors was selling more than 300,000 Camaros and Firebirds per year. And these were "specialty" cars -- not mass market family-type cars. The best selling car in the United States was an Oldsmobile -- the Cutlass. GM sold even more of those. It owned close to 60 percent of the entire U.S. automobile market.

    Toyota was, at best, a bit player -- purveyor of funny-looking econo-boxes with strange names like Corona.

    Today, Oldsmobile doesn't exist at all. The Camaro's in hiatus. Firebird's dead and buried. The best-selling car in the country in 2007 is a Toyota -- the Camry. And Toyota is now the world's largest automaker, in terms of total annual sales. GM clings to a 24-25 percent market share, roughly a third of what it once commanded.

    Who could have predicting this startling 180 back in '77 -- at the very height of GM's glory?

    Probably no one -- as it would have been unimaginable. American companies dominated the car business. GM was simply beyond challenge. Even Ford bowed low before the Master.

    So, what happened? And who (if anyone) is to blame?

    The conventional wisdom is that the American car industry generally (and GM especially) was laid low by a combination of gas shortages and hurriedly passed emissions control laws (chiefly, the Clean Air Act of 1970) that left them stuck trying to sell over-large, inefficient vehicles designed for a 1960s market that no longer existed. The Japanese -- who specialized in small, more efficient cars -- got an artificial leg up. They were given what amounted to an "instant market" for their gas-sipping little cars -- and didn't have to amortize (pay down, over time), the cost of tooling and chassis designs for bloated gas hogs, as GM, Ford and Chrysler were stuck doing.

    But if that's so, how come business was still booming -- especially for GM -- years after the original OPEC embargo and Clean Air Act had been passed? Sales of several large, not-so-efficient GM models (notably, the Camaro/Firebird coupes and the Oldsmobile Cutlass) soared, post '75 -- the first year for catalytic converters and the beginning of the "new" era, when MPGs were considered far more important than BHP. By 1978, for example, production of the Pontiac Firebird alone (not including its sister car, the Chevy Camaro) had jumped to 187,284 (up from 84,063 in 1975). Add Camaro and combined F-car production surpassed the number of Camrys Toyota sells today. It was on the order of 400,000 cars. And keep in mind, the Camaro/Firebird were "specialty" cars -- coupes with cramped back seats and small trunks.

    For mainstream models like the mid-sized Oldsmobile Cutlass, the numbers were even healthier. GM sold some 536,000 of these in 1979. The final year of the seventies was, in fact, the second-best year in Oldsmobile's entire 100 year history.

    So the death spiral didn't really begin until the '80s. That's when Chrysler fell into bankruptcy -- and GM and Ford began to see their former dominance begin to slip away. But this was almost ten years after the passage of the Clean Air Act of 1970; public concerns about fuel economy were not news anymore. Or shouldn't have been.

    What happened was the Japanese listened to customers -- while Detroit refused to. Honda and Toyota continued to incrementally improve cars like the Civic, Tercel/Corolla and Camry/Accord; GM continued to produce dated designs long after they'd become obviously obsolescent. Or -- as Ford did -- produced a car like the Taurus that actually sold well, then left it to rot on the vine until it became a "rental car special" has-been. Someone's head should have been on a platter for that job.

    GM also had a real problem with rushing cars to market before they were ready (the Cadillac Allante comes to mind) or "cheaping out" a design that had great potential (think of the Pontiac Fiero, which was welcomed with rave reviews when it appeared in 1984 -- until people found out about its Chevette-based chassis/suspension). There were constant problems with quality control -- and customer treatment, too. People got sick of it -- and left for greener pastures. Many have not returned -- and aren't likely to.

    How is any of this to be laid at the feet of the Japanese -- and "unfair trade"?

    The domestics also sat on their hands during the birthing of the Japanese luxury car spin-offs, Acura and Lexus. They scoffed -- and kept on selling arthritic old boats with fake convertible tops and wire wheel hubcaps for the Strom Thurmond set while Acura and Lexus peeled off younger buyers and began to seriously challenge top-shelf German and British luxury car brands like BMW, Benz and Jaguar.

    In 1989, there was no Japanese luxury car segment. Today, the Japanese are among the major players in the luxury car segment.

    What excuse is there for this criminal negligence? Lexus, Acura and the rest didn't steal their customers; Lincoln and Caddy gave them away. Indeed, they pushed them out the door in many cases.

    The indictment doesn't end with luxury cars, either.

    As recently as 2005, there wasn't a single domestic brand small car that could be considered the equal -- in terms of refinement, build quality and technical advancement -- of the import "benchmark" small cars, Honda's Civic and the Toyota Corolla. GM was still selling the crickety old Chevy Cavalier -- a car that should have been discontinued at least five years previously, or completely re-done. Ford tried a succession of "world cars" -- including the ill-starred Contour and Mystique. Belly flops. Every couple of years, there'd be a new model -- often with an entirely new name and zero "brand equity." People didn't recognize them -- and didn't want to take the chance. As recently as last year, Ford's Lincoln division launched the Zephyr -- then decided that wasn't right and changed it to MKZ. Who knows? And more to the point, does anyone care? Lincoln is looking kind of green. It even allowed the once big-selling Navigator (which pretty much created the premium luxury SUV segment) to fade into third-tier status by failing to significantly update the thing until just this year.

    The point to all of this is that persistence -- and a long-term view -- are what enabled Toyota to become the world's largest automaker. Not "unfair trade." Not the competitive hobbling of American automakers by legislative fiat and the ups and downs of gasoline prices. We are looking at a self-inflicted wound here.

    But Detroit is still in denial.

    Toyota just launched its first true full-size truck -- armed with an available 380 horsepower V-8 and near 11,000 pound towing capability. Ford's F-150 (at present, the best-selling vehicle on the market) comes to the table with a swishy (in comparison) 300 hp V-8 as its most potent offering -- and it can't beat the Toyota on towing.

    Will Ford (and GM and Chrysler, too) snicker at the very notion of a full-size "Jap" truck?

    Probably.

    And it will be their undoing.

    Again.


  2. #2
    Senior Member misterdecibel's Avatar
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    Re: Why Toyota's Number One

    Quote Originally Posted by Eric


    Toyota was, at best, a bit player -- purveyor of funny-looking econo-boxes with strange names like Corona and B210.
    B210 was a Datsun.

  3. #3
    Vulture of The Western World Eric's Avatar
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    Re: Why Toyota's Number One

    Quote Originally Posted by misterdecibel
    Quote Originally Posted by Eric


    Toyota was, at best, a bit player -- purveyor of funny-looking econo-boxes with strange names like Corona and B210.
    B210 was a Datsun.
    Ack! Yep, my coffee was not strong enough this morning... thanks for the catch!

  4. #4
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    Re: Why Toyota's Number One

    Quote Originally Posted by Eric
    Quote Originally Posted by misterdecibel
    Quote Originally Posted by Eric


    Toyota was, at best, a bit player -- purveyor of funny-looking econo-boxes with strange names like Corona and B210.
    B210 was a Datsun.


    Ack! Yep, my coffee was not strong enough this morning... thanks for the catch!
    The NMA sells excellent coffees for mornings when its hard to wake up. https://secure.motorists.org/secure/coffee.asp

  5. #5
    mrblanche
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    Re: Why Toyota's Number One

    One point is that Toyota and Honda both "tested the waters" in America, found out what the population wanted, and has spent the last 35 years improving on it.

    Just an example: Nissan continues to make a modern version of the Z car, which could be compared to a Camaro, and the have steadily improved on the MR2, where Pontiac said there wasn't a big enough market for either the Firebird or the Fiero. Mazda has made a killing selling and improving the Miata in a market that Triumph and MG gave up on.

  6. #6
    Senior Member misterdecibel's Avatar
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    Re: Why Toyota's Number One

    Quote Originally Posted by mrblanche
    One point is that Toyota and Honda both "tested the waters" in America, found out what the population wanted, and has spent the last 35 years improving on it.

    Just an example: Nissan continues to make a modern version of the Z car, which could be compared to a Camaro, and the have steadily improved on the MR2, where Pontiac said there wasn't a big enough market for either the Firebird or the Fiero. Mazda has made a killing selling and improving the Miata in a market that Triumph and MG gave up on.
    Yeah, but Toyota also gave up on the MR2 twice. It's gone now, as is the Celica. No coupes or sporting type vehicles in Toyota's present US lineup, apart from one Scion. Nissan gave up on the Z-car for a few years too, only to re-introduce it with much ballyhoo.

  7. #7
    Vulture of The Western World Eric's Avatar
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    Re: Why Toyota's Number One

    Quote Originally Posted by misterdecibel
    Quote Originally Posted by mrblanche
    One point is that Toyota and Honda both "tested the waters" in America, found out what the population wanted, and has spent the last 35 years improving on it.

    Just an example: Nissan continues to make a modern version of the Z car, which could be compared to a Camaro, and the have steadily improved on the MR2, where Pontiac said there wasn't a big enough market for either the Firebird or the Fiero. Mazda has made a killing selling and improving the Miata in a market that Triumph and MG gave up on.
    Yeah, but Toyota also gave up on the MR2 twice. It's gone now, as is the Celica. No coupes or sporting type vehicles in Toyota's present US lineup, apart from one Scion. Nissan gave up on the Z-car for a few years too, only to re-introduce it with much ballyhoo.
    Very true.

    But bear in mind that cars like the MR2, Z-car, etc. are not volume sellers; these are specialty, so-called "halo" cars that add image to the lineup - but rarely do much for the bottom line.

    What Honda and Toyota excel at is consistently designing "bread and butter" cars that have broad appeal - the Civc, Accord, Corolla and Camry being examples. Sexy? Hardly. But they move them in vast numbers...

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