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Toyota Looks To Mimic Nissan For Success

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On: Thu, Nov 10, 2011 at 10:55AM | By: Chris Salamone

Toyota Looks To Mimic Nissan For Success

Dire circumstances call for special measures. Usually big corporations avoid positive competition name dropping, especially with the ever-present specter of shareholder power. However, at Toyota’s basement midterm financial meeting the company made a few intended references to a chief competitor: Nissan. While Toyota has suffered an operating loss of 32.6 billion yen (or $417 million dollars) to date, Nissan has recorded an operating profit of $309.7 billion yen ($3.88 billion dollars) despite similar obstacles in the form of massive earthquakes and Thai flooding.

Toyota’s Chief Financial Officer, Satoshi Ozawa, noted Nissan’s performance at least twice during his presentation. “It seems that Nissan has run their operations wiser than Toyota has done. If there is something we can learn from their example, then there is some homework for us to do.” And then, five minutes later: “In terms of what happened after the earthquake or the Thai flooding, it seems Nissan suffered less than Toyota. If there is something there to learn from, we’d like to do that.”

Aside from Heaven’s cruel application of fate, some mention of the soaring Japanese yen is necessary. Toyota makes about 3 million cars in Japan annually, a number which is significantly larger than Nissan. While both companies try to export half of their Japanese-produced vehicles, Nissan’s lower Japanese production yield makes the company less susceptible to Japanese currency volatility.

How can Toyota avoid natural disasters and negative yen fluctuations? Americans will surely answer that question with a certain amount of skepticism—by moving production elsewhere. Toyota appears to embrace globalization, and already plans to react. Ozawa noted that the company “… will make more efforts to produce them (cars) outside of Japan.” But how will broader production efforts impact vehicle reliability, local Japanese economies, and international perceptions of the brand?

These questions, and more, remain even more obscured because—for the second time this year—Toyota has chosen not release any financial forecasts. The first time, back in March, was accepted as a result from the tsunami. This go-around can be attributed to lasting impacts from Thai floods. To date, Toyota has already lost the value of 150,000 unproduced cars from the Thai floods alone.

In the coming years Toyota will have significant challenges ahead. Getting back on track will require tough decisions and perhaps choosing a former competitor for mentorship is a good start. Let’s hope Mother Nature agrees.

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Stephy21 | 9:41AM (Fri, Nov 11, 2011)

hopefully Toyota can come back from there down fall

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