Toyota, GM Battle for Sales Supremacy
ROBERT SIEGEL, host:
One is tempted to say of this news that U.S. auto giant, GM, has been eclipsed by Japanese carmaker, Toyota. And if you've seen those commercials for Chevy Silverado pickups with images evoking contemporary American history and the nationalist lyrics of John Mellencamp, you certainly get the picture. GM wants us to know how American they are.
(Soundbite of GM's Chevy Silverado ad)
Unidentified Man #1: This is our country.
Mr. JOHN MELLENCAMP (Singer): (Singing) This is our country.
Unidentified Man #1: This is our truck. The all-new Chevy Silverado.
SIEGEL: On the other hand, Toyota has been here for so long, both selling and making cars, that they've been advertising about how American they are.
(Soundbite of Toyota ad)
Unidentified Man #2: Toyota, a company that, along with its dealers and suppliers, has helped create hundreds of thousands of U.S. jobs. A company proud to do its small part to add to the landscape of America.
SIEGEL: Well, it turns out neither company maybe entirely on the level here. The auto business, like so much else in the economy, is increasingly global.
Micheline Maynard is New York Times' Detroit bureau chief and joins us now. Let's talk first about this company that's contributing to the American landscape, Toyota. How many of the Toyotas did Americans buy are actually made here?
Ms. MICHELINE MAYNARD (Detroit Bureau Chief, The New York Times): It's about 54 percent.
SIEGEL: Fifty-four percent?
Ms. MAYNARD: Yes.
SIEGEL: And the trend?
Ms. MAYNARD: Well, the trend is actually up on imports. In 2004, about 37 percent of the vehicles that they sold here were made in Japan. And last year, about 46 percent of the vehicles that they've sold were made in Japan. And one big reason for that is the popularity of this hybrid electric vehicle called the Toyota Prius.
They actually think they may almost double Prius sales this year. And so even if they're building these new factories and employing more Americans and selling more cars built in America, they're actually bringing over more cars from Japan.
SIEGEL: And how does that compare with other Japanese automakers who sell here?
Ms. MAYNARD: Well, I think, Honda has a better record than Toyota. And Honda was actually here first in the United States, building cars here first. And close to something like three-quarters of their vehicles are either built in the United States or Canada. So they could actually claim the crown as being more American than Toyota.
SIEGEL: Well, now as for General Motors, for GM, it turns out some of their most encouraging markets in what was for them a good quarter, I gather, even though they slipped behind Toyota, are not the domestic U.S. market.
Ms. MAYNARD: That's true. And in fact, China is now General Motors' second largest market behind the United States. It used to be Western Europe, but over the last year or so, it's become China. And they're selling Hummers in Latin America. They're selling vehicles in all parts of the world and they're building new factories in different parts of the world. They've just announced plans for a new factory in Mexico.
SIEGEL: So there's a competition here in the U.S. for a share of the U.S. auto market, but then a U.S. and Japanese automakers are also competing in third markets for share.
Ms. MAYNARD: Exactly. And in fact, Toyota itself is being very aggressive in China and in South Asia, in Australia, in other parts of the world as well. Toyota has had a remarkable success in Europe, as a matter of fact. And it wasn't maybe 10 years ago when people, sort of, mocked Toyota and said Europeans would never depart from the most wonderful cars in the world to buy those Japanese cars.
Well, there are plenty of Europeans that wanted the quality and the reliability that Toyota has offered. And Toyota is now introducing their Lexus vehicles in Europe as well.
SIEGEL: For so many decades, the United States epitomized the car market since we were so much more auto obsessed it seemed than anybody else. Today still are - is this the centerpiece of the global car economy even as these other markets grow, or is it being cut down to scale a bit more?
Ms. MAYNARD: Well, I actually think things are kind of evening out a little bit. The markets used to be Japan, the United States, Europe. Now it's a free for all. China has emerged. China, I think, will probably eclipse Western Europe itself as the world's biggest car market. Central Europe - places like Poland, Hungary, the Czech Republic - they have a car market that's growing.
Everyone thinks that India's car market will probably explode at some point. And so really what we're seeing is that instead of, sort of, the iconic General Motors and American vehicles of the past that have dominated the world psyche that, you know, everybody was going to have a little piece of this game.
SIEGEL: Well, how big a deal is it actually that Toyota now is number one in the world?
Ms. MAYNARD: You know, it's one of those things that everybody in Detroit has known was coming. But I really think the first step towards this came in September of 2003 when Toyota beat Chrysler for the first time to become the number three carmaker in the United States. I think that kind of opened the door to what happened today.
And now there are people that would not rule out Toyota beating General Motors in the United States someday to be the biggest carmaker here.
SIEGEL: Micheline Maynard of The New York Times. Thanks a lot for talking with us today.
Ms. MAYNARD: My pleasure. Thank you.
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