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A Total Meltdown, originally uploaded by @ Brad

There are many different ways that you could describe the situation that Toyota has found itself in as of recently. Some sources peg the overseas portion of Toyota at near the end of its days, while others claim that it is a savvy company that will pull up its bootstraps and get itself together soon. Out of those two viewpoints, there is at least one thing that we all can agree on, and that is that Toyota has hit rock bottom as of lately.

CNN Money reports on the companies growing loses in the U.S. market have grown so severe, the company has no choice but to pull back and put itself into neutral. This has meant pulling back on production, and could likely mean the closure of plants in the near future. How could this be happening to a company which has stood like a rock over the past decade?

Corporate decisions and a businesses success are all about allowing a business to grow at the appropriate time. When the economy is good, they take  profits, store some away for a cold winters day, and use the rest to help expand operations and take up a larger portion of the market. When the economy is bad, they pull in their fragile extremities, tighten up expenditures, and start feeding off their winter surplus.

What happened to Toyota, many experts say, is they were in the mode of growth and expansion when the automotive market crashed, leaving them in a very vulnerable position. For example, they were nearing the completion of their new Prius plant in Mississippi when everything shifted downhill. Now the plant stands dormant with no firm completion date.

Toyota has found themselves in a position they would have never imagined a year ago. They are no longer gaining points on the market, but rather losing to growing companies, such as Hyundai. Many experts say that Toyota’s leading edge may have already come and gone, opening the opportunity for new leadership.

The Rebirth of a Stronger Domestic Market
While U.S. consumers have been complaining about the domestic poor quality of vehicles, Toyota actually counted on that somewhat to gain yearly on the market share. Today as it stands, with GM and Chrysler busy reinventing themselves, shedding their dirty laundry (poor brands), and focusing on making themselves competitive, Toyota will not have as easy a time winning over consumers.

In addition, Ford has also proven itself a worthy competitor over the months. At the moment, the Ford Focus in on top of consumers clunker replacement list, beating out the Toyota Corolla by a fair margin.

Another problem Toyota faces, is that there is no where for them to go to help boost their dwindling sales. They already has an iron in just about every segment of the automotive industry, and the only way to reach beyond that would be to focus on more niche-type vehicles.

Some experts would say that Toyota has already overextended themselves (spread itself thin) with too many niche models that overlap each other. This could leave them in a similar position as GM, who after gas prices increased last year, found their popular big SUV and truck market swept out from under them.

Toyota’s future maybe unknown, but they are still a force to be reckoned with. There are a lot of changes to come in the automotive industry, and nobody quite knows who will be the future leaders once all the exhaust gas is cleared.

Source: CNN Money