Toyota Races to Rev Up Production For a Boom in Emerging Markets [Wall Street Journal]
Summary: The Wall Street Journal reviewed a confidential Toyota document that details how the firm aims to achieve 15% global auto market share by 2010, up from 11% in 2005. Toyota recently surpassed Ford as the world's 2nd largest auto maker by sales and is closing in quickly on GM. Toyota's "global master plan" predicts the global auto sales market will expand 12% by 2010, to 73 million units, driven primarily by the BRIC nations of Brazil, Russia, India and China. Industry research firms and Toyota rivals alike, see the potential of the BRIC markets. One of the biggest risks however, is competing on price, as local competitors will likely be most aggressive in trying to serve the low-end market with autos priced between $5,000-$7,000. So far among global players, Renault's Logan starting at $7,300 is the benchmark. Also, Toyota cited rising gasoline prices as a risk it is most concerned with. If prices were to reach $80 a barrel in 2010, Toyota predicts its sales would decline by about 8% that year to 9.52m units. Nonetheless, Toyota plans to boost annual capacity by 450,000 units a year to help meet its 2010 goal.
Related links: No Tough Times For Toyota • Toyota Beats with Record Earnings, Raises Guidance and Dividend • India's Auto Industry Attracting More Investment • Bill Ford Jr. On the Importance of China's Auto Market • Toyota Speeds Ahead of Competition in China • GM, Ford Eye India's Middle Class • Toyota Aims for 1 Million Mark, 10% Share in China by 2010
Potentially impacted stocks and ETFs: Toyota (NYSE:TM) • Competitors: Honda (NYSE:HMC), Nissan (OTCPK:NSANY), General Motors (NYSE:GM), Ford (NYSE:F), DaimlerChrysler (DCX) • ETFs: BLDRS Asia 50 ADR Index (NASDAQ:ADRA), BLDRS Developed Markets 100 ADR Index (NASDAQ:ADRD), iShares NYSE Composite Index (NYSEARCA:NYC)
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