TOKYO – Ask a Toyota executive in private which Asian carmaker he worries about, and hell say Hyundai Motor.
Nissan wont come up. In market after market, category after category, the Toyota colossus is far ahead of Nissan. And there is little sign that Nissan is closing the competitive gap.
Toyotas global juggernaut is no doubt the reason that Renault-Nissan CEO Carlos Ghosn sounds so eager to align his automakers with General Motors. Ghosn needs GM to help him do battle with Nissans ancient rival.
Consider the following:
Nissan began building cars in Europe well before Toyota and for many years led its rival. Not now. Last year, Toyotas market share of 5.6 percent in Europe – more than doubled Nissans 2.4 percent.
The combined European share of alliance partners Renault and Nissan was 12.9 percent. Good, right? Except that Toyotas sales rose while Renault-Nissans fell. That trend has continued this year.
In the US, Toyotas market share for the first six months was 14.6 percent to Nissans 6.1 percent. This year, Toyota has imported more cars to the United States than Nissan sold here. And Toyota assembles more cars in North America than it imports.
The dominance is even greater in Japan. Last year, Toyotas market share of 40.6 percent there dwarfed Nissans 15.1 percent.
Toyota also leads Nissan in sales by a substantial margin in Southeast Asia and by a small one in China.
To be sure, Nissan Motors 9.2 percent operating-profit margin in the fiscal year that ended last March 31 was fatter than Toyotas 8.9 percent. Nissans advantage there has been even greater in some recent years.
Toyotas profit margins have suffered because of massive spending on new plants globally. But it still has an enormous war chest of cash. In contrast, Nissan is essentially debt-free, a major reversal for the once-tottering automaker.
But Toyota is not likely to give up its lead anytime soon.
Toyota expects to spend ¥920 billion (currently E6.26 billion) on r&d in the 12 months that began April 1. That is 4.1 percent of its revenue. Nissan spend 4.9 percent of revenue on r&d, but that is only E3.4 billion.
Ghosn definitely needs GM, global No. 1 in unit sales, to effectively compete with Toyota.
You may e-mail James B. Treece at [email protected]