Toyota to raise prices out of consideration for U.S. car makers

"Toyota Motor Corp. is preparing to raise prices of its new cars in the
United States by an average 2 percent to 3 percent in October out of
consideration to its struggling U.S. rivals, the Asahi daily said on
Friday."
http://news.yahoo.com/s/nm/20050610/bs_nm/autos_japan_toyota_dc

This article cracked me up. "Out of consideration"... nice spin. Maybe
they can buy some of GM and Ford junk bonds to prop them up too. =)

 

Look at the market capitalization of Toyota as compared to Ford or GM.
Toyota could actually buyout GM, but it would lower its own stock price.

 

Of course Toyota could buy out GM... but why would they want to do
that?

GM's market cap is so low, they could could buy themselves out. ($20B
market cap compared to $300B debt).

 

The $30B is an over-hyped on generally misunderstood number. The
vast majority, about 90%, is from the credit company, GMAC.
Anyone know how much debt the other leading loan companies hold?
And how GM's $30B of auto company debt compares to any other auto
company's?

I don't think that debt is much of an issue. The real issue is
the long-term retiree and worker obligations compared to their
current and future market share. And even there, I suspect that
the present crisis is somewhat media overblown. Just MHO.

 

In Japan a company can not be owned by a foreign corporation.


mike hunt

 

Hmm, good point. I'm don't claim to understand financial statements.
But for the record, I did not mistype $300 B. Their debt really is $300
B, not $30 B.

I'll take another approach then: I noticed that GM has $15B cash, so
they still almost can buy themselves out. I checked Ford too, and
they're even closer. $18.7B cash compared to $19.1B market cap.

 

No, I mistyped. You are correct that the total debt is $300B, of
which all but about $30B is GMAC's.

 

japan has retirees, too. and its expensive as hell to live there.

its not like they send all their old people off onto flaming rafts in
the sea of japan, or give em seppuku swords to kill them selves instead
of a gold watch.

i think part of the reason lies with nationalized health care.

 

GM was the single largest corporation in the world. If I recall,
there are currently about 1M retirees that GM covers. I would be
surprised if Toyota's numbers are anywhere close, but I cannot say
for a fact.

To be sure.

 

Not to mention universal retirement - wouldn't it be ironic if the Big 3
CEOs lead the way to universal health coverage in the US?

 

It won't be ironic at all. After the big stink and divisiveness created over
the Clinton health plan many think tanks were quietly reporting that within
10 years 70% of the plan would be in effect anyway regardless of the party
in power. The economic realities of costs of retirement and health care and
the global business climate will have voters of both parties clamoring for
help as not only the poor but the middle, working class get dumped.
jb

 

Define "own."

GM owns approximately 20% of Suzuki and Fuji Heavy
Industries (Isuzu). Ford owns 33% of Mazda. DiamlerChrysler
owns 85% of Fuso (Mitsubishi Fuso Truck and Bus Corporation)
and 34% of Mitsubishi Motors. Clearly Fuso is "owned" by
DiamlerChrysler. Ford effectively controls Mazada. GM
effectively controls Isuzu (not sure about Suzuki though).
DiamlerChrysler does not appear to control Mitsubishi in the
same way Ford controls Mazda...I wonder why?

Ed

 

fuji heavy industries makes subarus along with fuji photographic
products. hence, the subie with the saab makeover.

 

GM also has a large piece of Suzuki but they build the cars in
the former Daewoo plants in Korea. Ford has a large piece of
Mazda but they can not own the company. Ford also had a big piece
of the Japanese electrical company that developed the hybrid
system for the Escape and the Prius but could not buy the company
even though would like to. Toyota bought the company.



mike hunt

 

i was under the impression toyota designed the system wholly on their
own, and licensed the technology to ford.

 

?? Sure about that? Details?

 

That is what Toyota likes you to think. Aisin Seiki Co.,
Ltd. (aka Aisin AW and/or one of the many affiliated
companies) primarily developed the technology. Toyota liked
it so much, they bought a chunk of the company (well
actually they bought chunks of both Aisin Seiki and Aisin
Seiki' Aisin Warner subsiduary - all way yoo complicated for
me to understand). For whatever reason, Toyota likes to
obsscure the origins of the technology. Aisin's annual
report makes numerous references to supplying hybrid
technology for Ford's Escape, but never mentions supplying
similar technology for the Prius. In its annual report,
Toyota's only refence to its ownership stake in Aisin is
"Entities comprising a significant portion of Toyota’s
investment in affiliated companies include Denso
Corporation; Aioi Insurance Co., Ltd.; Toyota Industries
Corporation; Toyota Tsusho Corporation; and Aisin Seiki Co.,
Ltd." Figure out what that means.... As far as I can tell
Toyota owns about 25% of Aisin Seiki Co., Ltd and 40% or so
of Aisin AW (so does this mean that Toyota really owns 55%
of Aisin AW - 40% directly, plus 25% of the 60% Aisin Seiki
owns????).

If you want to try to figure out who is sleeping with whom,
http://www.toyota.co.jp/en/about_toyota/pdf2004/ is fun
reading.

Other references:

http://www.aisin-aw.co.jp/en/04news/list.html#20
http://www.aisin.com/profile/customer/index.html
http://www.overthehillcarpeople.com/CurrentNews.htm
http://www.toyota.co.jp/en/ir/reports/annual_reports/04/pdf/ar04_e.pdf

Ed

 

If foreign companies cannot own companies in Japan, how come
DiamlerChrysler owns 85% of Fuso? And I don't think Ford
ever owned a significant percentage Aisin (or Aisin-Warner,
or Aisin AW, or any of the other names the company and it
subsidiaries use). Ford has and does buy parts from the
various Aisin subsidiaries (including Escape Hybrid parts
and 6 speed automatic transmissions for the Five Hundred /
Freestyle). You are right about Toyota buying a chunk (or
chunks) of Aisin Seiki / Aisin AW / whatever to secure the
hybrid technology. The actual percentage owned by Toyota is
difficult to determine because Aisin and Toyota subsidiaries
are interwoven on many different levels. This is typical of
Japanese companies and their suppliers. I think something
like 70% of Aisin production goes to Toyota, so whether
Toyota owns a controlling interest or not, I am sure Aisin
listens when Toyota speaks.

Ed

 

Toyota has had its relationship with Aisin for at least 40 years, well
before the advent of hybrid technology.

 

Not so. It was a Japanese company working in concert with Volvo,
Toyo Togyo, and Toyota. Ford gained full access when they bought
Volvo. Each company licensed each others patents to avoid the
need for cross licensing. The system in the Escape and the
Prius, while based on the same technology, are difference in
application. Search "Automotive News" for the particulars


mike hunt