Toyota Accelerates Toward a Market Share Recovery

Toyota Accelerates Toward a Market Share RecoveryToyota (TM) will reportedly announce Friday that by September, it expects to have all of its North American plants back to their normal production levels. Then, it can begin attempting to recoup the U.S. market share it lost due to shortages related to the Japan earthquake and tsunami, as well as a slew of recalls.

It would be a mistake to count the company out. Toyota's slowing global sales have pushed it back into the No. 2. worldwide sales position behind perennial leader GM (GM). But GM's advantage is tiny based on unit sales.

Toyota's U.S. market share for the first five months of the year was 13.3% down from 15.2% in the same period in 2010. In May, thanks to earthquake-related inventory shortages, that figure fell to 10.2%, behind struggling U.S. car company Chrysler. Not so long ago, there was a time when Toyota's share was 18%, and it often beat Ford (F) in monthly American sales.

Toyota will benefit from pent up demand in the last quarter of this year. Some buyers will move to other manufacturers, but cars like the Prius are still the preferred product in their categories. Many experts expect that the scarcity of some Toyota models will allow it to raise prices. That may help the company's bottom line, but Toyota will have to decide whether the move will curtail unit sales.

Toyota's reputation has proved remarkably resilient since huge global recalls in 2010. That will almost certainly help its rebound. In the JD Power 2011 Vehicle Dependability Study, Toyota received four stars out of a maximum of five, and its Lexus luxury brand received five stars. Toyota's rating matched that of Mercedes, and beat Ford and Chevrolet, the two-top selling American brands.

Toyota seems to have benefited from brand equity, a repository of positive reactions to the brand built up over decades of producing high-quality cars and offering good customers service. This has almost certainly been aided by the fact that a number of the defects that caused recalls were actually due to human error and not mechanical trouble with its vehicles.

Toyota still has one of the strongest balance sheets among worldwide manufacturers, so it can afford to ramp up marketing programs in the U.S. It can also afford to give customers incentives to lure them back to dealerships. Its Prius, Camry and Corolla remain among the best-selling vehicles in the country, and its Highlander and 4Runner remain among the best-selling SUVs.

Back in the 1970s, Toyota's market share in the U.S. was negligible, but the company's ability to supply what the nation's consumers desired made it the second-largest car company in the country by the early 2000s. It still has one of the strongest dealership networks in the U.S. Once manufacturing recovers, Toyota will have all the pieces in place for a comeback.



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22 Comments

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madddddddddddddd

goooooooooooooooooo tooooooooooooooooooooooooooyyyyyyyyyyyyyyyyyyyy

we love ur cars.............

June 23 2011 at 4:43 PM Report abuse rate up rate down Reply
ultraz2

40 % TO 50 % DEEP DISCOUNTS ON ALL VEHICLES INCLLDING ALL SIENNA MODELS. are Toyota's best means of market share recovery

June 18 2011 at 9:27 PM Report abuse rate up rate down Reply
Mike

I'm Toyota'ed out, my new Ford which I traded my Toyota for is fine. I also feel better buying a Ford, besides how many years do you need to sit in a dull grey interior? Toyota and this report may think they are ready for a come back, but not with me.

June 18 2011 at 8:48 AM Report abuse rate up rate down Reply
frank1946

UAW is out of control with NLRB hassle on Boeing in N.C. !

Next car I buy will be Korea or Japan..................Unions think they can play King of the Monarchy ?

After Bailout of GM/Chrysler I am finally not a fan of Democrats or Big Government !

Toyota sounds refreshing.......................................they seem honest, more so than GM/UAW !

June 18 2011 at 12:37 AM Report abuse -7 rate up rate down Reply
2 replies to frank1946's comment
charlie

Hi Frank you sound like a real american what are thinking? former Marine why don't go to Korea or Japan to live

June 18 2011 at 10:23 AM Report abuse +2 rate up rate down Reply
richard

Duhhh, I`m Frank, Duhh, I love Japan, help me, I need a job, duhhhh...

June 20 2011 at 11:12 PM Report abuse rate up rate down Reply
Relevant Data

I bought my 2007 Toyota X-Runner brand new after it was made here in California. I recently got mail from a local chevy dealer that offered me $16 to $18 thousand on a trade in for a 2011 Chevy. Fat chance! I will never downgrade to a Chevy.

June 18 2011 at 12:23 AM Report abuse -6 rate up rate down Reply
1 reply to Relevant Data's comment
richard

You need to upgrade to a guinea pig brain.

June 21 2011 at 9:50 AM Report abuse +1 rate up rate down Reply
sgentilejr

Who in their right mind would want to buy a Toyota? For all we know they are radioactive just as the green tea exported form Japan is radioactive.The only way I would consider buying one now is if I owned my own Geiger counter and checked the vehicle out myself first. Yes, they may be assembled here in the USA but 30% of the parts come in from Japan. My wife and children mean far too much to me to take such a chance.

June 17 2011 at 11:39 PM Report abuse +1 rate up rate down Reply
walterb611

Stop paying all these taxes an maybe we will get our government to listen to the people.

June 17 2011 at 10:07 PM Report abuse rate up rate down Reply
walterb611

I say build in the usa an sell our own products at home let foreign country do the same no more imports..............

June 17 2011 at 10:05 PM Report abuse +2 rate up rate down Reply
Fred

Who bailed out Toyota??? Who bailed out Honda?? Whos bailed out GM and they ARE STILL FALLING ON THEIR FACES>>>

June 17 2011 at 5:43 PM Report abuse -1 rate up rate down Reply
4 replies to Fred's comment
jasfcbaychester

You mean their pulling a BP LOL

June 17 2011 at 5:42 PM Report abuse +1 rate up rate down Reply