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Did Toyota Bet Heavily On A Failed Gamble?

Agent009 submitted on 04/28/2008 Official Bell & Ross Timestamp: 2:09 PM
from: home.autonews.com

[22] user comments | category: Spy Shots

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Did Toyota Bet Heavily On A Failed Gamble?

Toyota and Scion vehicle inventories have risen to record levels because the company misjudged just how much the U.S. market would decline this year.

The number of units in dealership stock and en route have swelled to about 376,000.

That's about 100,000 units more than were on the ground last summer, and up from about 348,000 a year ago.

The main problem: Toyota produced lots of pickups and SUVs, a gamble that has not paid off.

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Ironman273 - 4/28/2008 2:17:53 PM

+7 Boost

:( Can't read the article without a subscription...

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tundrahq - 4/28/2008 3:08:07 PMView My AgentSpace

+1 Boost

You could have read about this for free on my site a month ago - we already covered it. Toyota's stockpile of Sequoias and Tundras is peaking right now, but they won't have any problems moving their trucks by end of model year because they've already cut production.

BTW, not that I'm picking a fight, but Ford is stockpiling F150's right now in preparation for the changeover to the new 09 model. They're going to shut plants down, so they're running full speed to make sure they don't run out of trucks. Ford's days supply is just as high as Toyota's, but no ones writing about that...

komododave - 4/28/2008 3:41:12 PM

+5 Boost

No one's writing about it because it's standard procedure. When a vehicle gets an upgrade, as the F-150 has for the 09 year, the factory must shut down to retool and retrain. This means no new production for a couple months. By stockpiling trucks, Ford is ensuring they continue to have the stock ready for all those people who want to buy the vehicle. They can't say "sorry, retooling for two months so there are none to sell, go buy another vehicle"

komododave - 4/28/2008 3:42:38 PM

+4 Boost

The Tundra isn't getting an upgrade, they just can't sell them like they thought.

tundrahq - 4/29/2008 1:03:35 AMView My AgentSpace

+1 Boost

komododave - that's not 100% correct. The last time Ford (or GM) upgraded truck models, they had one of their factories produce the new trucks and one produce the old ones. In last week's Automotive News, it was reported that Ford was facing a lot of resistance towards this whole stockpiling idea from their dealer body...new F-series aren't selling like they used to, so dealers are thinking they've already got enough to last thru the model change.

Still, I hear what you're saying. Ford's excuse for stockpiling IS better. But stockpiling itself, this early in the year, regardless of the reason, really isn't a big deal. Four months from now I'm confident Toyota will be no worse off than Ford.

droptop - 4/28/2008 2:44:05 PMView My AgentSpace

+3 Boost

weak, paid registration required.

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BigShow50 - 4/28/2008 2:45:21 PM

0 Boost

Not really, at least it has been detected now rather than later in the year. Production at their plants for their Pick Ups and SUVs have come down to a slow stop. It's time for them to open up their tresure chest and unleash those special incentives!!! Before it's too late!!!...it should not put too much of a dent for this year, considering they have a $40 Billion plus cash reserve.

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GodfatherSHM - 4/28/2008 3:46:50 PM

+1 Boost

maybe if the new sequoia didn't range from 45k to 70k, or new camry's 20k to 35k, or the FJ mid 30's, and even the 4Runner 25k to 45k, more people would be buying them...i think Toyota has got to full of itself and has out priced its consumer market. And yes, I currently own 2 Toyota's so I am not just a Toyota hater, i am a customer.

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autopro - 4/28/2008 5:13:15 PMView My AgentSpace

-2 Boost

Its smart to sell your car's for the most you can,if the market will support it.All they have to do is offer bigger incentives and buy the business if the demand falls off,which has in the first quarter of 2008.

JWalkerLegrande - 4/28/2008 4:03:05 PM

+2 Boost

The Tundra has been a major flop since day 1, no reason to blame the credit crisis. Wouldn't worry about Toyota though, they have deep enough pockets to weather thru the coming 14 months.

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Jeffo - 4/28/2008 4:14:04 PM

+2 Boost

I don't think the Tundras been a flop, they come within several thousand units of their goal of selling 200K Tundras the first year and Sales of the 08 Tundra are up more then any other full size truck for the year. New Tundra sales are up 41% for the year, the redesigned Chevies are down like 19% YTD.

tundrahq - 4/29/2008 1:06:54 AMView My AgentSpace

+2 Boost

You so crazy.

toolatetorace - 4/29/2008 9:32:19 AM

+1 Boost

jeffo, are you sure it isn't the other way around ??

damikco - 4/28/2008 4:31:08 PM

0 Boost

Toyotas core buyers want a plane jane simple car they Toyota is not known for great big suv's but never the less Toyota wants to try to kill the big 3's last profitable market buy building large suv's at which they faild badly.

reply to this comment

answer - 4/28/2008 6:16:38 PM

+1 Boost

That makes the kind of sense that doesn't.

ChicaneShooter - 4/29/2008 3:35:18 AM

0 Boost

LOL! a totally dumbicko 'analysis.' when the new tundra was intro'd, most buyers preferred the loaded up models. they couldn't deliver enuff of the 5.7 engined models.

meanwhile, the strippo and v6 models piled up on dealer lots, and toyota had to offer incentives on THOSE to clear the lots.

LexusLion - 4/28/2008 4:32:29 PM

+3 Boost

Gas prices are probably the main cause to the pickups and SUVs being overstocked, especially now that gas prices are approaching $4/gallon.

reply to this comment

porsche911 - 4/28/2008 7:18:54 PM

+2 Boost

That interior of the Tundra is simply not a place one wants to be in ... Its horrible in its layout and design....do these people honestly think they can sell anything these days? One other SUV from Toyota has a similar layout and design in the interior...I think it is the Sequoia...I just cannot sit in that car looking at that interior....and since I will be spening most of my time sitting IN the car, facing the windshield and the dashboard....I want something asthetic and nice and comfy to look at and feel.

reply to this comment

huu76 - 4/28/2008 9:43:02 PM

+1 Boost

Tundra's must still be selling fine in Canada, otherwise Toyota wouldn't be commanding 6.9 and 8.5% financing on them.

Aside from the housing bubble (which only a complete moron wouldn't have questioned), the other major reason is Canadians more often buy trucks for work so they can write-off the expense (truck and fuel) during tax time. Our cousin Cletus who buys his truck to show that he's more of a man than the yuppie fob BMW driver is more sensitive to higher gas prices. A truck is a pretty expensive gun rack.

reply to this comment

evilm - 4/29/2008 9:33:51 AM

+1 Boost

My their inventories are growing because their vehicles SUCK!!! People who buy the Tundra deserve to be beaten.

reply to this comment

ChicaneShooter - 4/30/2008 2:38:19 AM

+1 Boost

production and inventories WILL be eventually be balanced to match rate of sales.

in 'normal times' toyota had one the best handles on managing inventory. while most makers had 40 -80 days' inventory, toyota rarely had more than 30 days worth. they haven't so much lost control, as been caught off guard by the re-fi crisis and RECESSION.

managing inventory is but an extension of the "just in time" mfgr'g process which toyota INVENTED.

reply to this comment

ChicaneShooter - 4/30/2008 4:42:09 AM

+1 Boost

...one of the best handles on...

if i recall, on a lot of models they usually stayed at 20 - 25 days of inventory continuosly.

not uncommon for other companies to run with 40, 50, 60 - 100+ days.

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