While it appears that Ford is on the right track, competing with Toyota
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| Cost-saving foundry technology allows Toyota to 'rake' in the money. (Photo: Toyota Canada) |
will remain an uphill battle. Not only is the Dearborn-based automaker struggling to hold on to its customers, just like GM, with the two top-selling domestic automakers combining for 44.8 percent of U.S. sales last year, a 2.3 percent decline from the year prior, but Toyota wins over an average of six new buyers to every one it loses, while Honda gains four for every one lost. Together with Japan's second-largest producer Nissan, the two U.S.-leading Japanese manufacturers captured a combined 28.2 percent of the U.S. market last year, according to Automotive News, showing an increase of 2 percent.
Toyota's
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| Streamlining: a process that involves more than Toyota using their own commercial equipment. (Photo: Toyota Canada) |
profitability, the strongest in the auto sector, allowed its stock to rise 54 percent last year, up to an all-time high of 6,420 yen on February 17, 2006. Streamline the production of its V6 will only increase profits, and in turn make its stock more enticing to investors, strengthening its hold on the market. Comparatively, both GM and Ford lost so much ground last year that the ratings firm Standard & Poor's was forced to downgrade their stock to junk status, two of the largest company's to ever be subjected to such an embarrassment.
And just how much time will Toyota need to pass General Motors in global sales volume? With a total of 8.85 million expected sales worldwide in 2006, an increase of 2.95 million over its 5.9 million sales in 2001, it could slide past the world's largest
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| This kind of money-saving technology will be used for future engines. (Photo: Toyota Canada) |
automaker, which achieved 9.17 million unit sales last year, soon. GM has announced that it would be cutting production significantly by 2008, and this measure, combined with eroding market share and Toyota's continued growth, could see Toyota rise into the top position before the end of the decade, and maybe sooner.
And don't expect the new engine production technologies to only benefit Toyota's 3.5-litre engine. The Bodine foundry will soon make the upcoming Tundra's 5.7-litre V8 block, while other foundries will benefit from the Simple Slim improvements when they get updated. And don't think that Toyota will end its cost cutting efforts in engine manufacturing. It is reported similar initiatives are under way in the company's paint, plastics, welding and warehouse operations around the world.
Can
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| Engine components - and other mass automakers - are sure to feel the the heat from Toyota. (Photo: Toyota Canada) |
GM and Ford catch up and eventually keep pace with Toyota? History shows that the two will probably be left behind over the short-term at least, causing greater losses until wholesale changes are made, brought on by complete reevaluations of core business strategies. Ford, at least, seems to be on the right track regarding the number of V6 car engines it currently produces, while GM has seen improvements over the last five years by nearly halving the number of man-hours needed to produce its V6 engines. Such advancements will not be enough, however, to match the production efficiency and resultant lower costs and improved reliability of Toyota's Simple Slim processes.
