Toyota Supports Detroit 3's Cause

After the Senate announced last week that the $14 billion loan request has been put on hold, Detroit manufacturers are willing to do anything to convince the officials that such a decision would be harmful especially for the United States economy. However, the US carmakers may receive an unexpected help straight from its rivals, as overseas competitors aim to support Detroit 3 and their cause. Nevertheless, Japanese and European firms, in other words non-US carmakers in general, are actually fighting for their own cause, as a potential failure for Detroit 3 could also affect their business.

“How's that possible?” you may ask. Well, according to analysts, sales of all the other companies currently producing models for the North American market may go down by a number of reasons.

First of all, there's the supplier industry which would be seriously damaged in case the three major carmakers bite the dust. Erich Merkle, lead auto analyst with the consulting firm Crowe Horwath LLP, told CNN that Toyota and other overseas manufacturers would be really hurt by the supplier network, especially due to the fact that a lot of companies share the same auto suppliers. Analysts recently forecasted that suppliers may reach very tough times in 2009, with cost-cutting measures and job layoffs almost unavoidable.

Secondly, the already-insecure United States economy would lead to even more problems for other carmakers in business, Merkle explained. "The U.S. economy would be in shambles. The robust U.S. economy that Toyota and the others depend on would suddenly not be as lucrative,” he told CNN.

Last but not least, foreign companies might meet unexpected competition from less-known small manufacturers who may become interested in buying the remaining assets of the US companies. "Tata and Geely would be incredibly open to brownfield sites," the analyst explained, pointing that Chinese and Indian companies would be extremely interested in buying failed carmakers.

As a conclusion, while it may seem like supporting the Detroit 3, Toyota actually supports its own cause, hoping that a competitive market could help them remain on the same ascending trend. "We support measures to help the industry. We just want a strong, competitive healthy industry,” Toyota Motor spokeswoman Mira Sleilati concluded.
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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