This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
2/28/2007
Why Toyota is Afraid of Being #1
I read an article recently in Business Week entitled, "Why Toyota is Afraid of Being #1." This link, Business Week, takes you to the article. In the article, Toyota expresses the concern that becoming the number one car company in America may cause some Americans to become upset over the fact that they are not an American company. In my opinion, Toyota makes a quality car at a relatively inexpensive price. I do not see anything wrong with a foreign car company becoming the #1 car manufacturer in America. The article reports that the American born GM is upset over the possibility that Toyota is on its way to being #1. Well what are you going to do about it GM? What do you all think? Should we be concerned that more and more Americans are beginning to prefer foreign made cars to American made cars? Should be concerned that a foreign car company is on its way to being #1 in America?
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5 comments:
No it shouldn't be a concern that Toyota could become #1. Toyota makes a quality vehicle. With gas prices still so high, many people are turning to them because of their fuel efficiency. In reading the article, I felt that Toyota isn't afraid of becoming #1, but that they want to do it respectfully. They do not want to come in as a powerhouse, which I agree with, because there are sill many Americans who despise foreign made vehicles. These are the hearts that Toyota wants to win over. If anything GM needs to learn from their mistakes and take this as a challange to get back up to the top.
+1 for Jacob - I'm assuming that you were trying to fix the missing title with this re-post.
I think it is wise of Toyota to acknowledge this concern. Americans have always been nationalistic, and recent current events seem to have heightened these sentiments. Mason is right that foreign dominance in the car industry will be better received if it is achieved without an arrogant attitude. However, if we truly believe in capitalism, the company that captures the market, through their own efforts at quality and marketing, wins. Period. Protection of domestic manufacturers (through subsidies or tariffs) only helps those few U.S. companies (and even then not in the long run). GM and other U.S. manufacturers may need a little 'tough love.' They must face the consequences of their situations. Government assistance does nothing to encourage them to be better companies.
Toyota is an excellent company. The cars are high quality. They outsell all companies but GM -- even with tariffs. Toyota management is smart to worry about this image. Ford is running ads that it is an American company in hopes of capturing the market that abhors foreign-made vehicles. The interesting thing is that almost all foreign car companies are building their cars in America. VW, Toyota, Chrysler and others have all built plants in the United States in the last 10 years to form a natural hedge against the fluctuating dollar. So these companies are employing a lot of Americans too. I think GM and Ford need to face the music and stop complaining.
Toyota should be proud to be #1. It would be nice to see an American company there; however, they are not competing at the same level. This should encourage GM to become more efficient in their work. Only the strong survive in the market place. It is economically efficient for us to buy a car which is more dependable than others with a higher MPG rating. If GM wants to survive in the automotive world, they need to adaptive quickly.
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