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US market for Toyota automobiles Essay

The report examines Toyota’s sales in the US against the background of their receding economy. It was found that Toyota’s outlets have been recording poor performance. These are indicated by the numbers through declines in overall sales. Besides the latter, the company’s’ sales are going down because reports indicate that its sales forecasts have been revised downwards. Besides this, the company has also been performing poorly in the US because it intends on downsizing production capacities in a series of its manufacturing plants.

Toyota’s US sales have also been doing badly because the company is now thinking of exporting US manufactured vehicles to more profitable areas such as China and the Middle East The US economy is under recession. This has penetrated into almost all sectors of the economy. The food industry has not been left behind, the prices of gas are soaring and many other resources have plummeted. Consequently, any industry that depends on these resources has also been affected. The automobile sector heavily relies on gas plus other resources.

This means that their demand has definitely gone down. The essay shall examine the effect of the US economy on automobile sales for one particular automobile manufacturer; Toyota. (Herald Leader, 2008)

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How the US economy has affected Toyota Overall industry performance in relation to Toyota Toyota is one of the most influential foreign automobile companies in the US economy. Owing to the fact that many consumers’ purchasing power has diminished, Toyota recorded a decline in sales by eleven percent.

However, this performance was not synonymous to Toyota alone as its US competitors also recorded all time lows. All the three major US automobile manufacturers sold one hundred and fifty thousand less cars in the year 2007. This was a combination of General Motors’s twenty percent decline, Chrysler’s twenty eight point eight percent declines and Ford’s fourteen point seven percent decline. As it can be seen Toyota’s sales in the US have declined but not as much as their US competitors. This year, Toyota has reported a substantial decrease in the sales of a variety of models.

The sports utility types were the most affected models because SUVs and Pickups trucks recorded an all time low of twenty percent in purchases. Shown below is a model that is performing poorly in the US market. Reasons behind the drop in sales The economic decline is leading many potential automobile consumers away from Toyota because of pressing expenses. Many other sectors of the economy have been affected and prices of their products have sky rocketed. For instance, the housing sector is one such example.

This sector is actually an automobile competitor because at times, consumers who may be interested in purchasing automobiles may also be intending on purchasing a house. Since this market also has its own problems, then Toyota’s consumers may opt to settle on one issue over the other. In most cases, they may end up choosing the housing sector. Besides the latter, the housing market also affects the overall economy because so many investors rely on it. This means that when the housing sector performs poorly, then the rest of the economic (including the automobile sector) is bound to suffer.

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