Monday, December 11th 2017

GM to Become Top Automaker


Saturday, April 23rd, 2011
News

After the latest projections, it is anticipated that General Motors will reclaim its status as the world’s top automaker. Previously, Toyota occupied this position from 2008 on; however, after the recent Japanese earthquake, the company has experienced production issues as well as the safety recalls that were implemented years ago. The recalls have totaled nearly 14 million vehicles globally, and has immeasurably impacted the reputation of the company. GM’s resurgence to the number one spot, marks a return to the status the company occupied from 1932 to 2008.

This impressive recovery marks a major boost to the company’s morale after stepping back from the brink of bankruptcy just a few years ago. GM has been reporting increased sales in both China and the US, which are the two top markets for autos. The company has credited these increased sales to the improved quality of their cars. As critics point out though, for the most part, the victory on GM’s part is mostly a result of the problems with Toyota, rather than an indication of GM’s resurgent productivity and strength.

Toyota released a statement saying that they will not be able to return to the levels of production prior to the Japanese disaster until the end of the year. The supply chain disruptions as a result of this disaster are wide-ranging, and could further damage the company’s reputation, opening a gap in the market for GM to fill on a longer timeline.

The 17 plants in Japan that manufacture Toyota brand vehicles surprisingly survived the disaster relatively unharmed. However, the production capabilities have been impacted by the disaster with factory lines only working at roughly half capacity. Additionally, suppliers for Toyota are unfortunately located in the worst hit areas of Japan. These complicating factors are the main reasons for the disruption in Toyota’s productivity.

Sources:

http://www.websterpost.com/latestnews/x1274367876/GM-poised-to-once-again-become-worlds-top-automaker

http://www.nytimes.com/2011/04/23/business/global/23toyota.html?partner=rss&emc=rss

 



Article by Andrew Timm

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



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Tags: disaster, earthquake, general motors, gm, japan, production, toyota

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