Toyota's Chairman Urges Japanese Car Cos. to Raise Prices to Help Ailing U.S. Rivals
TOKYO April 26, 2005; Yuri Kageyama writing for the AP reported that Toyota's chairman is urging Japanese automakers to raise prices or find other ways to even the playing field with ailing U.S. rivals General Motors and Ford in hopes of heading off a possible protectionist backlash in the crucial North American market.
Toyota Motor Corp. Chairman Hiroshi Okuda was quoted by Japanese media on Tuesday as saying the plight of General Motors Corp. and Ford Motor Co. could result in problems for Toyota and other foreign carmakers.
Okuda told reporters Monday that Japan's auto industry must consider a response, such as raising car prices in the United States and cooperating in technology.
"We need to give some time for American companies to take a breath," Okuda was quoted as saying by the Nihon Keizai Shimbun, Japan's biggest business daily.
"I'm concerned about the current situation surrounding GM. Although a trade conflict, like ones (that) happened in the past, may be avoided, there may be some impact (on Japan's car industry) because the car industry is symbolic in the U.S. economy," Okuda was quoted as saying by the Japanese daily Asahi Shimbun.
A Toyota spokeswoman on Tuesday confirmed the quotes from the two newspapers, but added that the company has no plans to raise prices on its U.S. models.
Speaking on condition of anonymity, the spokeswoman also noted that Okuda was speaking in his capacity as the head of the key Japanese business lobby Keidanren.
Toyota and other Japanese automakers were the target of U.S. workers' outrage in the 1980s. The Japanese were accused of robbing jobs from American workers and market share from U.S. automakers.
Such sentiments have since subsided because Toyota and other Japanese automakers increasingly produce cars in the United States, creating jobs for thousands of Americans.
But Okuda's comments appeared to be an attempt to stave off any possible backlash. His remarks also suggests that he sees the American automakers as needing help to compete with Japan's car companies.
Last week, General Motors reported a loss of $1.1 billion for the January-March quarter, its biggest quarterly loss in more than a decade, partly because the Detroit automaker has been losing U.S. market share to Asian manufacturers.
While faring better than GM, Dearborn, Michigan-based Ford is also losing market share and says it could sink post a loss or break even before special charges in the second quarter.
Toyota, which reports earnings next month, has been consistently boosting global sales. It has a reputation for reliable fuel-efficient cars, and has an edge over rivals in environment-friendly hybrid technology.
Toyota, based in Toyota city in central Japan, has passed Ford to become the No. 2 automaker in global vehicle sales. Some analysts believe it's just a matter of time before it catches up with GM, the world's biggest automaker.
Other Japanese automakers are also reporting a robust performance.
On Monday, Nissan Motor Co. posted record profits for the fiscal year ended March 31 with U.S. vehicle sales surging 18 percent from a year ago. Honda Motor Co. reported a 5 percent increase in fiscal year profit Tuesday as sales climbed to a record for the fourth straight year.