Friday, January 29, 2010

Deflation

Excuse to halt production?

With worldwide auto sales plunging almost 50% from peak, one has to wonder when Toyota powers-down assembly lines for their most popular vehicles. My hunch: The only pedal they want off the metal is massive overproduction. Would you rather halt production for a strangely lengthy recall, or permanently cut auto prices 50%, inline with the rest of the retail market? I think Toyota choose the former; incompetent management gambling that this will blow over with their subprime-era prices intact. Pretty dumb, considering Japan has been in a horrible deflationary Depression for 20 years.

Posted by devo @ 10:48 PM (3742 views)
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5 thoughts on “Deflation

  • corporate panic

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  • Toyota’s days are numbered as king of the automotive production hill, Korean manufacturers are slowly eating away at their market share, the may be bland (Toyota’s are as well) but they come with up to 7 years 100000 mile manufacturers waranties. If manufacturers want sales they will have to cut their prices so expect to see more manufacturers moving production to lower wage economies, going ‘upmarket’ and keeping their traditional manufacturing bases as Rover found out is not the answer in our brutally globalised world.

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  • 2. enuii said… our brutally globalised world

    a big question….

    where does globalism go from here?

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  • Pass

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  • 4. enuii said… Pass

    open question: what’s the opposite of globalism?

    localism?

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