Toyota CEO Road Trip Goes To China

The United States may be Toyota’s largest market, but the largest car market in the world is China. After a grilling by Congress and meeting with the Transportation Secretary and employees meant to save as much of Toyota’s 18% market share in the US as possible. Akio Toyoda is off to the world’s most populous nation.

China passed the US as the leading car market in the world. More than 12 million new vehicles were sold in the nation in 2009.

Toyoda will speak with government officials in the People’s Republic. The No.1 car company in the world sold 709,000 cars in China last year which is well behind the numbers that GM and VW sell. Toyota had hoped that its quality reputation and fuel-efficient cars would help it catch the two market leaders. That plan was dashed by a global recalls of 8.5 million cars, although very few of those recalls were in China.

The China visit highlights how much trouble Toyota has beyond US and Japanese borders. Toyota relies on sales in India, China, and developing nations to increase revenue as slow economies in its two major markets and Europe keep car sales low. Total new vehicles sales in the US are only expected to be 785,000 in February, well below the rate that would be needed to create annual sales of 12 million which most car companies believe represents a healthy market.

Toyota has tainted the water for its cars around that world. That means that as GM, VW, and Toyota’s domestic rival from Japan–Nissan and Honda–take advantages of the surging Chinese market, the No.1 car company will be left behind. And, Toyota cannot afford that if it means to ever recover its footing.

Douglas A. McIntyre