Markethaus Musings

Who Will Be Number 1?

At yesterday's Autoshow events one of the topics of conversation was,

Will Toyota Overtake GM as the World's largest Auto Seller?

According to several sources, including GM executive Bob Lutz...this is a distinct possibility. A lot has been said about who will be number one and although there's some worry among local residents about not being home to the world's largest automaker, the trend has an air of inevitability about it. Toyota has been inching up on GM year after year, both in the US as well as international markets. GM still has a commanding lead in the US with market share in the high 20's.

How has this happened? A lot has been said about this as well. The answer lies, I think, in several areas:

• Product excellence and quality
  
• Expanding product portfolio
• Lean Manufacturing
• International investment

You'll notice I didn't mention marketing or styling. I believe Bob Lutz once said something to the effect, "Let's hope that the Nissan designers don't go to work for Toyota." I hope I got that at least somewhat correct. Toyota has never been known for its styling. And, I would argue, they have also not focused on "break-through" advertising over the years. In other words, no Joe Isuzu or Janis Joplin/Led Zeppelin in their ads. Nonetheless, they have slowly but surely taken marketshare, year after year.

Toyota is not perfect. They have made their share of mistakes. But what you have to admire is when they make a mistake...they fix it. An example is in minivans. Chrysler invented them, rolled them out and owned the market. The Toyota introduction (the Previa) was wrong in many ways from a design standpoint. But as I mentioned yesterday, they put their toe in the water and fixed in the next generation. The current Toyota Sienna is as good as anything on the market. We know they are likely to delivery a high quality product so once the design and package (engine, transmission, interior and exterior proportions/design) are right, they start to take market share.