Ford Overtakes GM In North American Production

General Motors (GM) has been the largest manufacturer in the united states since 1923. Due to the anticipated Chapter 11 bankruptcy filing GM will shrink substantially. Currently, GM has the following brands on the auction block....Hummer, Saab, GM Europe, and Saturn. In addition, they will discontinue the Pontiac brand.

Ford will displace GM as the largest North American auto producer this year. Ford’s North American output is actually expected to fall by 17.7 percent to 1.9 million units this year. But that number should keep the Blue Oval ahead of GM. GM is planning to sell or close the brands mentioned above.....also GM will cut production at 13 of its North American plants for up to 9 weeks this summer. GM North America should produce approximately 1.7 million vehicles this year.

Since the recession hit, GM financial problems have magnified. In 2008, Toyota overtook GM as the world's largest auto manufacturer. So it appears that GM will loose the second largest manufacturer in the world to Volkswagon.

Chrysler’s bankruptcy will also clear the way for Honda to move up to the number three spot. In fact, Chrysler will produce just over 900,000 vehicles this year – a decrease of more than 50 percent from last year – sliding the automaker all the way down to number five. Toyota should finish just ahead of Chrysler with approxximately 904,000 units produced.

2010 Toyota Prius

Today's post is about a vehicle the 2010 Toyota Prius, that started a paradigm shift in the auto world. The Toyota Prius has turned the automobile world inside out with their high mileage hybrid introduced in 2001. The other auto manufacturers have been playing catch up ever since. See the Edmunds.com video!

The word prius is a Latin word meaning to precede....a Toyota spokesperson stated that "Toyota chose this name because the Prius vehicle is the predecessor of cars to come. In business speak, Toyota is betting big that this will be next the successful technology in automobile fuel economy. I would have to agree that Toyota has proven the technology to be feasible and profitable.

Toyota was actually able to overcome the battery restrictions that had held the the GM EV1 from permanent production. Although, the EV1 was an electric car not a hybrid.

In 1994, Toyota executive Takeshi Uchiyamada was given the task of creating a new car which would be both fuel efficient and environmentally friendly. After reviewing over 100 hybrid designs, the engineering team settled on a hybrid engine design based on a 1974 TRW (an American auto parts supplier)patent, but many technical and engineering problems had to be solved within the three years that the team was given to bring the car to the Japanese market, a goal they barely achieved as the first Prius went on sale in December 1997. A main problem was the longevity of the battery, which needed to last between 7 and 10 years. The solution the engineers came up with was to keep the battery pack between 60% and 40% charged, proving to be the "sweet spot" for extending the battery life to roughly that of the other car components.

The car was a modest success in Japan then Toyota put it on sale in the U.S. and European markets in 2001. Sales were limited and customer waiting lists of up to 6 months were common during the first few years. In 2004, a complete redesign, increased production, and soaring fuel prices led to significant increases in sales, sales hit a high point with over 182,000 sales in the U.S.

The Prius has been restyled for 2010, the interior has been upgraded and the fuel economy increased slightly to 51 city and 48 highway. The performance from 0-60 mph. is 9.8 seconds. The base price is estimated to be $23,500 plus. See a Car and Driver article on the 2010 Toyota Prius.

My take is that the 2010 Toyota Prius is a continuing evolution of the hybrid gasoline electric car. Toyota will be rewarded for it's smart business acumen. It is a great green economy car, but not my cup of tea!

Economic Tsunami Hits Toyota

Toyota under a year ago was considered an automotive juggernaut and the largest company in Japan. Toyota was overtaking GM to become the worlds largest auto manufacturer with its Toyota, Psion and Lexus brands. Last month Toyota announced last month that it was posting its first annual net loss in 59 years, which is anticipated to be a $5 billion dollar loss for the year end March 31 st versus $37 billion dollar profit for 2008.

Due to the economic tsunami, Toyota has applied to the Japanese government for a multi-billion dollar loan. The company is seeking government help to hold off private investors demanding as much as 50% interest on the companies debt.

Toyota last month began an unprecedented production slowdown that called for reduced shifts and a 10 day closure of its 12 Japanese based plants. Also, it has fired 9000 contract workers which accounts for more than 10% of its 85,000 employees, with warnings that more layoffs are probable.


This cascading economic slowdown has flowed to Toyota City, were 80% of the people are employed in the automobile industry. It has an equally negative effect on revenue for the city with corporate taxes estimated to be down by 96%. Toyota City use to the envy of Japan with the lowest unemployment rate but now has the highest unemployment rate in the country.

Similar to the United States, auto suppliers are also in a critical stage. Many say that Toyota's production cuts will force bankrupcies unless they can qualify for government loans.

The bottom line is that this economic crisis is the most severe that I have seen since the 1950's. The world wide economic carnige will be wide and deep.

Please see the LA Times article by John M. Glionna for more information.