They automotive press is increasingly fond of claiming that Toyota is going down the same path GM went down. But words are cheap.
Did Toyota overexpand their production capacity just in time for a severe market downturn? Absolutely. But a single major strategic miscue does not inevitably lead to long-term decline.
The real thing to pay attention to is not Toyota’s current profitability, but how they react to their problems.
First off, do they react to problems by claiming that they aren’t really problems, or by attempting to fix them? GM has for decades tended to opt for the former. Toyota, in contrast, readily admitted that it had made some mistakes and that it needed to fix these ASAP.
Second, if a solution doesn’t work, do they give up, or make another attempt? GM, time and time again, has poured billions of dollars into “breakthrough” solutions, only to ball them up (or let them die on the vine) when these solutions don’t initially succeed. Toyota, in contrast, has a record of trying over and over. They’re on their third Lexus GS, for example. Keep at it, and they’ll eventually have one that wins over BMW owners.
The key isn’t avoiding mistakes, but learning from mistakes, and not giving up. So far, Toyota seems to still be learning, and persisting. So I do not believe it will go down GM’s path.
I seriously doubt any future Lexus GS will equal a BMW 5 series. Lexus are for comfort and luxury. BMW has sports driving in it’s DNA – totally different.
Look at the mother company, Toyota. They have no sports models in the US. MR2 and Celica were allowed to wither and die. Corolla S is merely a body kit. At least Honda, Subaru and other Japanese companies do real sports models like the Civic Si or Impreza WRX.
The lack of sports models is the best counter-argument. While the Scion tC arguably replaced the Celica, the MR2 and Supra have not been replaced. New sports cars are in the works, but Toyota’s track record does suggest that they might also be killed off after a few years of weak sales.
guyatherton, there are plenty of BMW owners who aren’t buying for the sportiness who Lexus would be able to pick off if they had made a midsize luxury sedan with more space inside than a Corolla.
bh – I agree with you to some extent. I would hope that everyone knows that BMW stands for luxury AND sport/performance. If you want soft riding, well appointed cars then buy a Lexus. Nothing wrong with that.