Tuesday, January 20, 2009

Toyota decreasing production in 2009

Because of the economic recession, many car companies have suffered a lot and in USA. All the major car companies needed some generous bailout support from the government. Since Toyota Motor Corporation (TYO:7203) is a Japanese company, it did not receive any generous support from the US government but its condition is yet some better than its American rivals. However, Toyota officials have understood that times are tough and they cannot sell cars in large volumes like past. So, they are going for decreasing production. In fact, they are going to make their production half in some places. America is the place where Toyota is suffering a lot for economic recession, fewer people are now thinking of buying cars. You know that in USA, 2.6 million people lost jobs in 2008 and there seems to be little scope of having any hope in 2009. So, many people are now embracing a long winter and Toyota officials are now responding to this problem by decreasing their production.

I feel that this is the right thing to do at this moment because making large number of cars would not reap any benefit for the company. Instead, they should focus on making inexpensive cars. One thing I do not like about Toyota is that they never focus on making inexpensive cars. They have also neglected the Indian market largely. In Chinese market, they are doing well but so far, they failed to understand this matter that Asian market is ideal for inexpensive cars. Not only the Asian market, if you want to do well in the East European, African and South American market, then you have to go for inexpensive cars.

 

Reuters

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