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Ford Sees Increase, Toyota Eyeing Decline

by Darren

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Toyota is facing slumping numbers and Ford Motor is expecting an increase in sales, indicating a change in the global landscape for auto makers. Toyota announced a 27% decrease in profits amid a North American sales slump, and Ford issued a release with much more optimistic news.

The sluggish U.S. economy has caused some of Toyota’s drop-off. Toyota North America accounted for 35 percent of the company’s fiscal 2008 sales, its largest sales region in the world. Rising gasoline prices are partly to blame: Oil topped $123 per barrel for the first time yesterday; the national average gasoline price is $3.65 per gallon, the AAA reported.

The first half of 2008 was solid for Toyota, the company wrote in its earnings release yesterday. For the year, the company reported $16.5 billion in profit on $253 billion in revenue, up 5 percent and 10 percent, respectively, and both company records.

In the second half, however, “disorder in financial markets triggered by the subprime mortgage crisis and high oil prices resulted in a severe economic condition and a downturn in the world economy,” the company wrote.

The Toyota report contrasts with:

“Our plan is working, and we’re sticking to it,” chief executive Alan Mulally said. “In spite of the head winds we face, we are more excited than ever about the incredible new Ford we are creating.”

Ford reported last month that its first-quarter profit was $100 million, testament to what it said was cost-cutting, restructuring and surging South American vehicle sales, which offset the ongoing North American sales slump.

Things might be very different when numbers are released for the next earnings report. Some analysts though that Toyota’s message was too gloomy and the company is predicting dire times in order to motivate their managers. Either way, we live in interesting times for auto makers, who seek to make the right moves globally as domestic markets undergo rapid change.