Times have been tough for the Detroit Big Three, but times have also
been tough on the Japanese Big Three. In recent months, the largest
Asian automakers, Toyota, Honda, and Nissan, have been forced to cut
production, cut jobs, and alter product releases due to dismal financial results and poor sales. Clearly, the economic concerns extend well beyond Detroit and truly involves everyone from around the world.
While the slip in Japanese sales and profits has not been quite has
steep as those of the domestic automakers, the time has come for
Japanese automakers to follow the same path. This week Nissan has
announced it will be cutting just over 8 percent of its workforce,
thanks to a $2.9 billion loss expected for this fiscal year.
Despite steep losses, Nissan plans to uphold its current aggressive
product development schedule. Included is Nissan’s upcoming electric
vehicle, which Hartford Nissan says remains a high priority according to Nissan management.
Honda also has forecasted trouble ahead, reducing its earnings
forecast by about 57 percent. While a profit is still expected
according to Honda Philadelphia,
Honda has preemptively cut salaries among board members and senior
managers. Toyota, now the world’s largest automaker, has also shed
salaries, cut production, and expects a loss of about $5 billion.
Further cutbacks are also expected. That being said, Westminster Toyota dealers see new vehicles such as the Venza crossover and the all-new Toyota Prius hybrid to boost sales momentum. Already, Irvine Toyota dealers have seen demand for the Venza due to heavy Superbowl advertising and other current incentives.
While all automakers are hurt by dwindling sales here in the U.S.,
the automotive markets in Europe and Japan are also seeing declining
auto sales. Even popular vehicles, such as the Toyota Prius hybrid, are
facing declining sales as potential car buyers steer away from new car
showrooms. In fact, a Toyota plant in Mississippi cut production of the
Highlander in order to produce additional Prius vehicles. However,
production there has been postponed, even as interest in the Prius has
remained high.
With the U.S. auto market being particularly challenging these days,
this year is looking to be a tough one for automakers and car dealers
alike. While forecasts already look grim, many industry analysts are
expecting the worst, with even more declines ahead in 2009.
Joe Kent is a writer for TK Carsites, an automotive website design and marketing firm in Orange, CA, that specializes in working with car dealers nationwide.
