: Toyota Motor Corp sales dropped 16 percent in January as the
automaker reeled from a massive recall and rivals Ford Motor Co and General
Motors Corp surged past it in the US
market share fell to its lowest level since January 2006 and its monthly sales
dropped below 100,000 vehicles for the first time in more than a decade.
Overall auto sales rose 6 percent from a
year earlier, powered by revived purchases by rental car companies which had
dropped out of the market a year earlier due to tight credit and concerns about
a deepening slump in the economy.
Fears of an extended sales slump pushed Toyota
's shares down 3.7 percent in a flat market in Tokyo
, compounding a
slide that has sent the stock down 17 percent since its recall was announced on
sales spun into reverse, Ford and Hyundai Motor Co emerged as the big winners,
each posting 24 percent sales gains.
In one telling benchmark, the Ford brand
Scion and Lexus on a combined basis. GM's volume-leading Chevrolet brand also topped
"Auto sales and market share is kind
of like a high-speed road race and if you get caught up in the gravel on the
shoulder you can get passed really fast, and essentially that is what happened
to Toyota," Autoconomy analyst Erich Merkle said.
"Right now we have to find out how
long it is going to take them to get back on pavement again," Merkle said.
Investors in Tokyo
were also trying to gauge the long-term impact of the recall, as well as the
weight of Toyota
surplus production capacity on profitability.
"The possibility that the impact will
last two to three years is low, but that doesn't mean we're rushing in to buy Toyota
now -- there are
too many unknowns," said Akihiro Tsunoda, senior investment manager at
Sompo Japan Asset Management.
's weak sales report came as US Transportation Secretary Ray LaHood
took a harder line with the automaker for what he said was a slow response to
"We're not finished with Toyota
," LaHood said.
US government officials said Toyota
could face both an
unusual civil penalty because of the recall and an expanded probe that would
focus on electric controls. Either development could further damage the
Japanese automaker's reputation for quality and cast a shadow over its results.
said its US
sales had been meeting company projections until the last week of January when
it was forced to take the unprecedented action of turning away customers for
many of its best-selling vehicles.
Eight of Toyota
19 models -- about 60 percent of the carmaker's US
inventory -- could not be sold
because of faulty accelerators during the crucial last week of the month, the
peak time for auto sales.
That cost Toyota
almost 20,000 sales of cars and light
trucks, executives estimated. That would represent more than $500 million in
lost revenue during the last week of January based on average vehicle sale
In addition, Toyota
faces costs of $250 million for its
first set of repairs under recall. The total cost of the recall would easily
top $1 billion to Toyota
and could deepen in the weeks ahead, analysts have said.
Gm Sales Up
Nissan Motor Co appeared to benefit from Toyota
's woes as its
sales rose 16 percent. GM's rose 14 percent.
Honda Motor Co, which made a point of not
following its rivals in targeting Toyota
customers, saw its sales drop 5 percent.
Chrysler, still the industry's weakest
player, posted a sales drop of 8 percent. Chrysler, now controlled by Fiat SpA,
has seen sales fall for 25 consecutive months.
market share ticked up to 16
percent in January. Toyota
which had 17 percent market share in 2009, saw its share fall to just above 14
chief, Bob Carter, said sales for Toyota
models outside the recall appeared to have dodged the fallout from the safety
action but cautioned that that could change. "I'm not underestimating the
confusion," he said.
Ford shares ended the day more than 2.4
percent higher. The stock has posted an eight-fold gain over the past year.
"We consider Ford as one of the
companies best-positioned to benefit from Toyota
tribulations but see others looking to gain too," Standard & Poor's
equity analyst Efraim Levy said.
A major factor behind Ford's gain was that
sales to fleet operators including rental companies more than doubled,
accounting for about 37 percent of its overall sales.
Retail sales through Ford showrooms were
down 5 percent, in line with what analysts and executives have said was a slow
month for an industry still facing an unsteady recovery.
"We should not expect the road to
recovery to be smooth," said Ford economist Emily Kolinski Morris.
GM's results were also buoyed by fleet
sales, which rose to 29 percent of total sales, from 25 percent last year.
Partly as a result, GM's US market share
jumped to almost 21 percent, from 15 percent a year earlier when the automaker
had been hit by consumer concern about its US government bailout.
Industry-wide sales were 10.78 million
vehicles in January on an annualised basis, according to industry-tracking
service Autodata. GM said it expected Toyota
troubles had cut 200,000 vehicles from that annualized sales rate.
Sales had been 9.6 million a year earlier
and 11.2 million in December, when showroom traffic was supported by year-end
incentives and an expiring tax credit.
Analysts expect 2010 sales in the US
market -- now the second-largest vehicle
market behind China
-- to recover above 11 million sales compared with a 27-year-low of 10.4
million unit sales in 2009.
First Published: Wednesday, February 3, 2010, 12:31