Why Are VW, GM, Chrysler, And Ford Eating Toyota's Lunch In The Biggest Car Market In The World?

Forget all the news you've been hearing about Toyota and "unintended acceleration" for a moment and think about this: Toyota is losing market share in China, the biggest and fastest-growing car market in the world. That's a problem.

Toyota's China problems really can't be understated. While GM, VW, Chrysler, Ford, Nissan, and Hyundai all experience tremendous sales growth in China (50%+ last year), Toyota's sales only grew 30% last year. Sure sure, 30% SOUNDS like a lot, but that hides the fact that Toyota's Chinese market share is set to drop from more than 11% in 2008 to just about 7% in 2011!

Losing 40% of market share in 3 years is the equivalent of a full-blown crisis when you look at the importance of China's auto market in the next century. Already larger than North America's auto market, it's estimated that the Chinese people will buy 20-30 million new vehicles per year by the end of this decade.

We all know that the secret to building market share is building loyalty with consumers, and this is where Toyota is failing. Part of the issue is cultural, part of the issue is the poor way that Toyota manages bad news, and part of the issue is that Toyota's products aren't very well designed for the Chinese market.

While North American media outlets prattle on about a "run-away" California Prius, here's the REAL news: VW, GM, Chrysler, and Ford are eating Toyota's lunch in the biggest car market in the world.







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Willis - 3/17/2010 12:31:09 PM

+6 Boost

That's a decent-looking Toyota in the photo. Still boring but also elegant and not as bland as the stuff they sell here in the US.

And regarding the poor sales of Toyota in China, I believe the Chinese feel a certain animosity towards the Japanese based on their past history together.

tundrahq - 3/17/2010 12:49:12 PM

+8 Boost

Willis - You are correct - the article goes into more details.

carguy68 - 3/17/2010 12:55:49 PM

+1 Boost

Toyota can't fool every one, the smart ones will never buy a toyota again.

veyron1001 - 3/17/2010 3:24:58 PM

+4 Boost

You mean the same people that complained that gas was near 5dol a gallon but still driving suvs?

commander104 - 3/17/2010 4:15:45 PM

+6 Boost

there are some cars that only look good in black, the camry is one of them.

Neverfollow - 3/17/2010 7:49:20 PM

+1 Boost

The article pretty much answers the headline's question doesn't it? Yes, it's largely cultural. Throw in some press about how dishonest the company has been recently and it doesn't really matter how "sorry" they are, it's going to cost them.......big.....everywhere. This has been brewing at Toyota for years. People high up the Toyota corporate ladder have known this for a while now, thus the mass exodus of top Toyota USA brass a few years ago. I mean, why would anyone in their right mind leave the head of Toyota marketing in the US 2 yrs ago for a deal with Chrysler? Ahem, nuf said.

izfuney - 3/17/2010 7:56:51 PM

+2 Boost

Actually Jim Press was pushed out of Toyota. why ? well the Japanese are fairly conservative and like the leadership to represent a wholesome family appeal and when Jim Press dumped his wife for a mistress, she raised hell with the other top brass, forcing them to take sides . Result, she got a lot of his cash,and Toyota sidelined him.
So why Chrysler, well Cerebrus was paying top dollar and young mistresses arent cheap, plus Jim had a shot at the top Job.

End result, Chrysler is dead/dying/gasping as FIAT quitely is throttling it with no new products and will morph into a dealership for crappy Alpha Romeos and FIATS which will make people weep at the "much better" quality of Neons and Sebrings..

tundrahq - 3/21/2010 5:11:46 PM

+1 Boost

Neverfollow - Good point. When Press left I felt like it was to have a shot at sitting in the "big chair," but I think your point about leaving because of a corporate cultural problem is interesting.

izfuney - Fascinating! Never heard that before...I'll have to look into it.

tundrahq - 3/21/2010 5:14:25 PM

+1 Boost

Huu76 - That's a very interesting point. It didn't make the article, but technically every manufacturer listed is selling through a "joint venture." So, GM is only half of the company that sells Buicks in China. Many analysts have wondered if China might kick out foreigners at some point...but I think those fears are a little too pessimistic. If the world's economy grows like many believe it will, China's economy will be interdependent with the USA and Europe. Booting GM, Ford, VW, etc. out of a partnership will cost China more than it's worth. Still, great point.