CSM Worldwide Predicts Toyota Will Become One of America's Big Three by 2009

DETROIT, Dec. 28, 2004 -- CSM Worldwide expects a new definition for the term "Big Three" by decade's end. According to CSM, the Toyota Group, which consists of the Toyota, Lexus and Scion brands, will pass DaimlerChrysler as the third largest seller of automobiles in the United States by 2009.

Currently fourth in the U.S. auto market behind the traditional Big Three of General Motors, Ford, and DaimlerChrysler, Toyota holds 12 percent of U.S. light vehicle sales. By 2009, CSM projects annual Toyota Group sales to widen 24 percent to more than 2.5 million units per year, or 14.1 percent market share, enough to dislodge DaimlerChrysler.

"Robust growth for the automaker will stem from an unrelenting product offensive, intensified effort in the luxury market, incremental volume from Scion, and strong brand equity," said Joseph Barker, CSM Worldwide manager of North American Sales Analysis.

CSM forecasts Toyota brand sales will climb 23 percent by 2009 as its offerings nudge further upmarket and expand body style and powertrain options. The upcoming 770N Avalon is a hint of things to come on the car side. Toyota also hopes to lure truck buyers with a more expansive lineup of upsized, more powerful CUVs, SUVs, and pickups.

At Lexus, sales are projected to grow 40 percent by 2009 despite intense competition in the luxury realm. CSM sees Lexus growth spawning from the addition of new nameplates and successor models that will exceed the sales level of outgoing vehicles by as much as five-fold. The bold 2006 GS luxury sport sedan will spearhead the Lexus product offensive and establish the future design direction for the brand.

CSM expects sales from Scion, Toyota's youth brand, to reach 125,000 units in 2005 before stabilizing at 100,000 to 120,000 units over the long term. Because Scion is attracting new customers rather than cannibalizing from Toyota, sales are incremental to the Group.

In addition to expected robust nameplate sales, CSM points to Toyota's wide-ranging North American manufacturing base, strong residuals and resilient brands as key attributes that bolster the company's position in the U.S. market.

From small cars to full-size SUVs, Toyota is capable of building North American-focused vehicles in North American production facilities. This makes Toyota less vulnerable to instability in the dollar/yen relationship, which has a profound impact on vehicle costs. According to CSM, North American- sourced vehicles will account for 63 percent of Toyota's U.S. sales in 2004. That number is forecast to rise to 70 percent by 2009.

Toyota Group returns some of the strongest residual values in the business. High trade-in values allow Toyota to attract shoppers with cut-rate lease deals and put more money in the hands of returning customers. "Strong residuals have the power to turn a first-time buyer into a long-time brand loyalist," said Barker.

CSM also warns new products will continue to infiltrate an already saturated market that has limits to its expandability. Consequently, mature players will be squeezed and frail brands will have the daunting challenge of sustaining sales share. "There is no foreseeable end to mounting competitive pressures in the U.S. market," emphasized Barker. "Healthy brands will be imperative to surviving the unforgiving market of the future."

CSM Worldwide (http://www.csmauto.com/ ) supports more than 350 of the world's top automakers, suppliers and financial organizations with global market intelligence and forecasting services. With corporate offices in Detroit, CSM Worldwide covers the global automotive environment from London, Frankfurt, Paris, Tokyo, Shanghai, Sao Paulo, Singapore, Bangalore and Budapest.