It's been a bad sales year for the auto industry, with domestic automakers hit particularly hard. Now, even the most successful foreign brands are bracing for a hit. The Wall Street Journal reports, "Toyota isn't having an easy time in the U.S. either. The Japanese car maker may cut its 2008 sales targets in response to the toll that high gasoline prices are taking on demand in the U.S., its most important market."
The AP explains, "Toyota may scale back its ambitious target of selling more vehicles in the United States this year than it did in 2007, as damage from an economic slowdown and soaring oil prices becomes more fully known."
The news is particularly significant because many Asian automakers had, until now, been somewhat insulated from the forces hurting sales of domestic automobiles. Bloomberg notes that "Toyota's U.S. sales through May dropped 3.5 percent. In contrast, GM's sales plunged 15.8 percent, dragged down by a 22 percent decline in truck sales. Ford's sales dropped 11 percent in the period."
Toyota is now the world's largest automaker, and a sales decline at GM this year has made that dominance more pronounced than ever before. U.S. News & World Report's Rick Newman has written that Toyota's 2007 profit was "about $15 billion, more than GM's entire market capitalization of about $10 billion."
When the world's largest automaker could buy the second largest with less than one year's profits, it seems reasonable to think they've mastered selling automobiles in any market. It's hard to imagine a worse sign for the automotive industry than to see that company start lowering its expectations.
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