The U.S. Car Market's Peak Is Behind Us, Toyota and Nissan Think

Toyota Prius Prime 1 photo
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For a very long time, North America has been the main export market for most Japanese car manufacturers. During the first nine months of this year alone, 1.3 million cars belonging to Japanese companies have been sold in the U.S. and Canada.
As a scale reference, that's twice as many as the vehicles sold in Europe and four times more than those sold in the rest of Asia. In other words, excluding the domestic market, North America accounts for more than half of the total number of cars sold by Japanese automakers. Any significant change will not only affect Toyota, Nissan, Honda or Subaru, but also the Japanese economy as a whole.

Now, Automotive News tells us that Toyota Motor Corp. has cut its sales forecast for the North American market for this fiscal year by 60,000 vehicles. More than that, the world's number one carmaker also said it expects a drop in profits for the first time, following the US consumer's regained love for large trucks as the price of fuel remains low.

Toyota reported a 43 percent slump in quarterly operating profit yesterday, which prompted Takahiko Ijichi, a Toyota executive vice president, to declare that "the market turned out to be somewhat weaker" and that it will require "very careful managing going forward."

Toyota has been guilty of offering a lot of incentives in order to boost its sales, with the flipside of obtaining smaller profit margins. Takahiko Ijichi calls them "appropriate levels" (of incentives), but the fact of the matter is that by the end of the fiscal year in March, Toyota is still expecting a 40 percent drop in operating profit to $16.3 billion.

The good news for the Japanese manufacturers comes from Asia, where there is still room for growth. China in particular is looking like the most favorable prospect, especially for more accessible models that could appeal to people in less developed cities.
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About the author: Vlad Mitrache
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"Boy meets car, boy loves car, boy gets journalism degree and starts job writing and editing at a car magazine" - 5/5. (Vlad Mitrache if he was a movie)
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