Life As A Juggernaut: Why Toyota Is The Hungriest Car Company in the World.
Peter DeLorenzo

Detroit. We've been referring to Toyota as being a "juggernaut" for several years now - and for good reason. We're talking about an automobile company that earned just over $10 billion for their fiscal year just completed at the end of March, double what Ford and General Motors earned combined. Amid the mind-numbing numbers Toyota keeps delivering is the stark realization that it has the kind of momentum in the market that hasn't been seen since the glory years of GM's heyday. Toyota sales in North America alone increased to 2.1 million vehicles - 121,000 more than the previous year. Toyota's worldwide sales climbed to 6.7 million vehicles, up almost 10 percent from the 6.1 million units a year ago.

Besides the fact that Toyota will surpass Ford as the world's No. 2 automaker this year - what does this all mean, exactly?

What it means is that success breeds more success in the car business, and because of Toyota's advantageous position and unbelievable cash flow - they can press their advantage in every segment they choose to compete in, address their real problem areas and afford to take some "flyers" in the market that the other car companies don't have time to even think about.

For instance Toyota will spend $6 billion on research and development - the very lifeblood of this business - this year. That means they can spend more and do more with their resources than any other car company in the world. Nothing fuels a car company's momentum like a generous research and development budget - and in this case, Toyota is going from strength to strength with no letup in sight.

And with the success Toyota has had, they can afford to start addressing the one glaring problem that hangs around them like a ball and chain - and that is their lackluster designs. Toyota's tepid design presence is now the focus of a new push inside the company, with Lexus in particular due for a high-powered image boost. They're even opening an outpost of their California-based Calty Design Research studio in their burgeoning Ann Arbor, Michigan, technical center - to lend some much-needed "juice" to their design efforts.

You can even take a swing at the youth market like Toyota has with Scion. They can afford to spend whatever it takes to "seed" the Scion brand in the North American automotive landscape. While other car companies are scrambling to carve out their own piece of the small car market, Toyota can attack subsegments and chase nuances - that's what deep pockets in this business will allow you to do.

Again, when you have cash flow, you can assess and address weaknesses, and even explore and experiment - without fear of stubbing your toe. Maybe that also explains why Toyota is the only car company in the world right now that can compete in three major racing series - Formula 1, the Indy Racing League and NASCAR - at the same time.

Add to all of this the fact that Toyota can recruit the best talent in the business, from designers, engineers, managers and quality assembly people, right down to the finest dealers available, and it's easy to see why Toyota's stated goal of capturing 15 percent of the worldwide market by 2010 - which would tie GM as the world's largest car company - is a goal that absolutely no one doubts they'll achieve.

But perhaps the biggest luxury that comes with Toyota's momentum?

While other automakers are reeling just to make their "numbers," Toyota has the kind of financial stability that enables them to take some chances - something other car companies around the world, who are teetering on the edge of solvency, simply cannot afford to do.

So, get used to it, folks. Toyota is a car company the likes of which this industry has never seen before. They are not content to rest on their laurels - not by any stretch of the imagination. They're even deathly afraid of getting too "big" in attitude, like so many other car companies have before them. Which is why they remain ever vigilant in their quest not to lose their way.

As a matter of fact, Toyota is the hungriest car company in the world right now. They're using their success to do more research and development, chase down their flaws, explore new segments and fine-tune the details - all in order to build on the eye-opening success they've already achieved.

In short, Toyota just wants it more than everybody else - and unless it completely blows up somewhere along the way, it will be "The Juggernaut" for many years to come.

Thanks for listening, see you next Wednesday.

Originally posted by JLSC4


I once said in a previous thread that Toyota would likely become the
world's largest automaker (passing GM). People of course replied
saying it would never happen. I think 10 years is a reasonable goal.
This is especially achievable if they capture more of the truck market
that the big 3 American companies currently dominate.

Other companies should be very afraid.

As far as capturing more of the American truck market, right now, their biggest obstacle is the Nissan Titan...which, unlike the Tundra, is a TRUE full-size truck.

Other companies should be very afraid.