Toyota finds solace in emerging markets

  • 09/05/2008

  • International Herald Tribune (Bangkok)

TOKYO: Toyota Motor said Thursday that the slowdown in the U.S. economy would most likely cause its first annual decline in profit in nine years, and accelerate a shift by it and other Asian carmakers into emerging markets like China, Latin America and the Middle East. The emphasis toward emerging markets is part of a broader trend in the auto industry, and underscores the declining stature of the United States in the global economy. Both Asian carmakers and U.S. rivals like General Motors have seen a rising portion of sales in emerging markets that were not even on most companies' radar screens a decade ago. Toyota, in a dead heat with GM to be the world's largest car company, said most of its recent profit growth had come in markets like China, Russia and Brazil. It said this helped offset sluggish sales in the United States, traditionally Toyota's largest and most profitable market, and other mature economies like Japan and Europe. "Our profit structure has become more geographically balanced, with growing contribution from resource-rich countries and emerging countries," Toyota's president, Katsuaki Watanabe, said in a statement. This shift has been partly driven by the faltering prospects of the U.S. auto market. Declining American sales, along with the weakening dollar and rising material prices, prompted Toyota to forecast a 27 percent decline in net profit to