Monday, February 02, 2009

Toyota cuts global demand forecast

I don't have much to add other than to note that it is February and GM/Chrysler have said they will run out of money by 3/31 if things don't improve. If Toyota has had to cut their demand forecast by 1-2% in the last MONTH, it is clear that things are not getting better for the automakers.

After the stimulus and bank bailout part 2, expect Auto Bailout part 2 to be the talk of Washington.

"Toyota Motor Corp is further lowering its global vehicle sales forecast for this fiscal year ending March and now expects to sell around 7.4 million units, as the global auto market shrinks more than expected, the Mainichi Shimbun reported in its Monday morning edition.

It would be Toyota's third downward revision to its sales outlook for this fiscal year, and the new forecast would be down more than 100,000 units from the prior projection of 7.54 million units announced in late December. Toyota had originally forecast 9.06 million units in May.

A Toyota spokesman declined to comment on the Mainichi report."

Also, it is interesting to note - According to the Director of the Port of Long Beach (CA), Toyota has 150 acres of leased parking which is full of new cars (from Japan) and Toyota is planning to lease an additional 25-30 acres for new shipments coming in over the next month or so. The Director further stated shipments out of these storage facilities appear minimal.

It might be nice to buy some parking lot stocks :)


Update: There has been some new whispers about US demand for 2009. This has been my big concern with the entire industry. In 2006, 16.56 million vehicles were sold in the US (domestic and foreign vehicles). That number dropped to 16.15 million in 2007 and 13.2 million last year. During the first round of bailout of talks, GM said they could breakeven if US vehicle demand was 12.5 million. My concern was that US vehicle sales might be just 10-11 million in 2009. The Big Three have started to quietly indicate that their forecasts were probably high and that 2009 US sales might be as low as 10 million units. It should be interesting to see how Washington reacts to this news (I suspect they'll force the automakers into bankruptcy in exchange for more bailout funds).

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