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Realistbear

G M Pushes Toyota Back Down To No. 2

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http://news.bbc.co.uk/1/hi/business/6907739.stm

Last Updated: Friday, 20 July 2007, 06:46 GMT 07:46 UK
GM
retakes sales lead over
Toyota
Global sales at Japanese carmaker Toyota have been briefly overtaken by US rival General Motors, figures show.
Troubled GM briefly took back its crown as world's top carmaker after selling 2.41 million vehicles from April to June, according to company figures..../
But outside its home market, the popularity of GM models is rising, particularly in Latin America, Africa and the Middle East.
GM has announced plans to invest $500m in Brazil and Argentina to develop smaller vehicles for the region and other emerging markets.

The word "resilience" comes to mind. It is a little odd that GM are outpacing Toyota who also have a massive currency advantage over Europe and the UK. But then again the Yen and $ are more or less pegged in their relative "decline" against the Euro-currencies.

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More telling than unit sales is profits. Last year, Toyota made $13.4 billion. GM lost $2 billion.

Meanwhile, Toyota's market cap is $223 billion and GM's is $20.4 billion.

So which is number one?

Edited by i_godzuki

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More telling than unit sales is profits. Last year, Toyota made $13.4 billion. GM lost $2 billion.

Meanwhile, Toyota's market cap is $223 billion and GM's is $20.4 billion.

So which is number one?

Isn't GM technically bankrupt? Why are they still in the market? Someone is pumping here.

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Isn't GM technically bankrupt? Why are they still in the market? Someone is pumping here.

I think both GM and Ford are technically bankrupt.

I'm largely ignorant of many things financial, can someone explain to me how it's possible to 'lose' (where does it go? down the back of the setee?) $2bn yet still be able to pay your staff and remain in business.

Edited by frozen_out

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Isn't GM technically bankrupt? Why are they still in the market? Someone is pumping here.

I smell something rotten about this

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I think both GM and Ford are technically bankrupt.

I'm largely ignorant of many things financial, can someone explain to me how it's possible to 'lose' (where does it go? down the back of the setee?) $2bn yet still be able to pay your staff and remain in business.

You pay your staff but not your suppliers. You can carry on doing this until your suppliers realise that you are not capable of paying them back, then they get upset. :(

Then some one comes along and buys the business for approx £10. They then proceed to tell the creditors that they are not going to get anything at all, unless they are willing to provide more credit/goods to keep the company going. They then fleece the creditors for a bit more by lining thier pension funds and claiming a few million in bonuses and then go bankrupt.

It is model of what is/will happen to the UK. China and Japan are our creditors and they haven't realised we have not got any ability to pay back the debt we owe. :lol:

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I smell something rotten about this

They can pay by spending their cash reserves or by selling assets, such as Aston Martin or Jaguar in Ford's case. It's not dodgy. Ford seems to be in a worse position than GM right now. Interestingly, one of the few bits that's doing well is Mazda, which Ford has a 33% stake in.

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Guest d23
More telling than unit sales is profits. Last year, Toyota made $13.4 billion. GM lost $2 billion.

Meanwhile, Toyota's market cap is $223 billion and GM's is $20.4 billion.

wow, that currency advantage seems to be really kicking in for GM.

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If they are the big gas guzzlers I shouldn't get too excited. When the oil price keeps rising I expect sales to resume their downward slide.

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GM is a hopeless company. They had to sell a majority stake in the last profitable part of their business, their GMAC financing arm, to a hedge fund to stay afloat. They also borrow money to keep going in the form of bonds (who on earth buys them?) - similar to a UK homeowner using credit cards to pay the mortgage. They'll file for chapter 11 at some stage, some PE group financed by an eastern sovereign wealth fund will buy it (one just bought Chrysler), if they can somehow deal with the pensions & get the unions to agree to fire the majority of the workforce.

Ford is having a firesale of Jaguar, Volvo, etc - they may be just a few years behind GM.

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If they are the big gas guzzlers I shouldn't get too excited. When the oil price keeps rising I expect sales to resume their downward slide.

Spot on. GM will no way get any advantage over Toyota. Possibly only if they created the 100mile per dog t@rd car, or so.

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Spot on. GM will no way get any advantage over Toyota. Possibly only if they created the 100mile per dog t@rd car, or so.

A friend of mine just got a 2nd hand 2.5l petrol X type at a 'great' price, however, as he states himself, when he takes it on the motorway and puts his foot down he can see the fuel level dropping!

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A friend of mine just got a 2nd hand 2.5l petrol X type at a 'great' price, however, as he states himself, when he takes it on the motorway and puts his foot down he can see the fuel level dropping!

I have owned quite a few Toyotas including 4 Camrys while in the US. Faultless vehicles and never had them in for any kind of repairs beyond the usual oil changes and routine maintenance. However..............I recently bought a '53 plate Avensis and while it handles nicely and has a great engine (40 mpg from a 1.8 petrol automatic) and tranny there are one or two things which suggest Toyota may not be the class leader on quality and reliability they used to be. Non-operating remote petrol tank door, squeaky dash, some ill-fitting interior bits, leaky headlight fittings and nasty door rattles on rough roads. Of course, it is made in the UK which may have something to do with it.

IT is interesting to se JD Powers put a German car back on top (Mercedes) although Toyota (Lexus) and Honda do come in 2nd and third. I still think GM make a pretty decent product overall with the smaller Vauxhalls and larger Caddys particulalry good.

Its a pity the Miracle Economy has destoyed anything remotely British and it looks like Jag is soon to go bust as the latest is that they are finding it difficult to "sell" a multi-million pound loss maker for anything resembling cash. Who in their right mind is going to buy a Jag XJ in the US for $80k when you can buy an S Class or Audi A8 for far less?

I wonder how long Gordon will allow our last manufacturer, the budget end of the market Morgan, to stay afloat--don't they use GM/Ford powerplants? Aston did okay because they had Ford Zetech engines bolted together and were reliable and the rich Mullahs and Sheiks love them to swan around the country as a symbol of Western exploitation of the poor masses who don't get a cut of the oil action.

Edited by Realistbear

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The word "resilience" comes to mind. It is a little odd that GM are outpacing Toyota who also have a massive currency advantage over Europe and the UK. But then again the Yen and $ are more or less pegged in their relative "decline" against the Euro-currencies.

you make the assumption that a lower currency means more competitive and more sales.

that might or might not be the case.

the value of currency ONLY effects your labour costs.

for example, a Japanese company making aluminium. the labour costs are less than 2%, energy and ore makes up the rest. if the yen appreciated to double its current value you may think they are screwed? but in reality they are unaffected. Now they get their energy and ore for half the price and can sell it for half the price. The currency only affected their labour costs!

so the currency value only effects goods that are labour intensive. such things as building cars are definitely not labour intensive so the value of the currency is of little meaning.

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you make the assumption that a lower currency means more competitive and more sales.

that might or might not be the case.

the value of currency ONLY effects your labour costs.

for example, a Japanese company making aluminium. the labour costs are less than 2%, energy and ore makes up the rest. if the yen appreciated to double its current value you may think they are screwed? but in reality they are unaffected. Now they get their energy and ore for half the price and can sell it for half the price. The currency only affected their labour costs!

so the currency value only effects goods that are labour intensive. such things as building cars are definitely not labour intensive so the value of the currency is of little meaning.

When Audi sells a A4 2.0T in the US for the going rate of $30k (14k pounds) Germany receives a commensurate amount and their trade balance is affected accordingly--whatever the labour costs to build ther Audi. Thus, the lower $ lines German pockets just a little less than if the Audi had sold for a more realistic $40k to cover the appreciation in the Deutschmark, er Euro. But competition is such that the US buyer will go for a Lexus when the differential is too large. Similarly, Jag has done poorly in the US because it cannot be sold for a large markdown price due to the cost of production in the UK and the fact that the Germans and Japs build a better product for less.

The bottom line is that I think the US and Japan are working the markets to suppress their respective currencies in anticipation of a sharp recession where a lower currency value will mean less imports and more exports. Protectionism without having to do anything. They have pulled a flanker I think.

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