The bailout package for Detroit has sparked controversy and mixed feelings as some have felt that the Big Three brought trouble on to themselves. But with many others hoping the government will step-in soon to provide vital financial help, it isn’t only American drivers hoping for a bailout. Toyota and other Japanese automakers also endorse the use of federal aid to keep General Motors, Chrysler, and Ford out of bankruptcy and in the marketplace.
The dynamics of the auto industry are such that the fate of each are intertwined with each other, and as such as Toyota and Honda hope for the survival of GM and Chrysler, even if it seems counter intuitive on the surface. First, Asian automakers produce 3 million vehicles per year at facilities within the U.S. If the Big Three fell into bankruptcy, the Asian automakers fear that their own production may be in jeopardy, as a Cleveland used Toyota notes Toyota accessories and parts suppliers may also be sucked into financial peril with a Big Three bankruptcy.
With a great amount of overlap between those supplying the automakers, Birmingham Honda dealers think it will be inevitable that the production will be disrupted due a potential bankruptcy. It could take months before Toyota or another automaker would be able to stabilize production and return operations back to normal.
Asian automakers have made steady gains in the North American market in recent years. With manufacturing and dealer operations working in their favor, one used car dealer boston believes that Japanese automakers don’t want to mess with a good thing and see Detroit place strain on their manufacturing output.
But manufacturing isn’t the only area where a Big Three bankruptcy will cause intense strain. Dealers in the U.S. often sell a combination of domestic and overseas brands such as Spokane Chevy. Not only would inventory be affected, but dealers also believe that a Big Three failure would also eat away at the already low demand for new cars. November auto sales saw substantial declines in demand, causing a 26-year low for auto sales.
The U.S. remains the largest market for Toyota, Honda, and Nissan, which is why a stable market, with the Big Three alive and well, is essential to helping theses automakers maintain momentum. Already, weak overall demand in the U.S. has forced Japanese automakers to lower their sales projections, which is why the automakers, points out one Pittsburgh Honda dealer, are hoping for any measure that will bring stability to the industry and bring about consumer confidence.
With weak sales and a poor economy, Toyota and other automakers are simply not immune to sales and production issues. For example, this week Toyota cut its plans to open a new manufacturing facility in Mississippi. The plant was scheduled to produce the next generation Toyota Prius, which has previously been in high demand at Toyota Albuquerque and elsewhere across the country.
It’s expected that the Japanese automakers would gain greater market share should a Detroit automaker fail. However, Nissan Tacoma fears that having to sell inventory of the failed brand would depress the prices of new cars throughout the inventory, at least in the short term.
While the failure of a U.S. automaker could place strain on Japanese automakers, it could open doors for others. An Indian or Chinese automaker, for example, could purchase assets of the failed company and become a low cost option for American consumers. India’s Tata and China’s Geely are two such automakers that are gaining ground in developing markets, and may see such an opportunity to enter the lucrative U.S. market cost effectively. Regardless, Acura Auto Service Pittsburgh and others in the auto industry feel that a ripple effect will eventually reach them from the fall out of a Big Three bankruptcy.
Having upstart companies from overseas compete within the U.S. is nothing new. Korean automakers have slowly been carving out their own market share for years, with more even greater moment in recent years thanks to attractive, high-value models says Hyundai Chicago dealers. But by piggybacking off of the assets, design, and dealer network of a U.S. automaker, an Indian or Chinese automaker would have the opportunity to grab market share at a quicker pace than their Korean rivals.
To prevent upstarts maintain the inroads they’ve gained over decades of hard short, Japanese automaker such as Toyota are hoping for the survival of GM, Chrysler, and Ford. They also don’t want to see an upstart automaker make inroads in the wake of a domestic automaker’s failure.Volvo Dives into Plug-in Hybrid Technology
Volvo has been struggling amid slumping global sales, but that hasn’t stopped the automaker from diving into research and development. One such as product of its R&D efforts is a new plug-in hybrid that will be due by 2012. Volvo has committed itself to producing a high mileage diesel-electric plug-in hybrid, but it has yet to confirm its plans to sell the vehicle in the U.S.Lexus ES Still Critical to Luxury Brand Lineup
As one Lexus’ most popular models, there will be plenty of drivers that will be happy to see a revamped Lexus ES 350 coming to showrooms later this month. While it may not be a full redesign, the updating certainly brings needed enhancements.Euro Civic Type-R Teases U.S. Consumers
In the U.S., Honda is mostly known for producing somewhat conservative, economical cars. However, the image of Honda outside of the States is far more performance oriented. This is attributed to a range of models that can be had overseas, but remain unavailable here.