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Friday, August 25, 2006

Toyota Saves GM And Ford From Themselves

Stocks: (GM)(F)(TM)

The Wall Street Journal reports that Toyota is looking at a program to slow down its growth plans and delay introduction of certain new models by as much as six months. The company wants to improve quality control issues that have lead to recalls of some of its vehicles.

The irony is that nothing can stop Toyota's ever increasing market share, especially in the US, expept Toyota itself.

Ford has already announced that it will cut Q4 production by 21% due to slow sales of its trucks and SUVs.

Toyota's sales in the US during July were up almost 12% and the company passed Ford to take the No. 2 market position. GM's sales dropped 22% for the month as truck sales fell 31%. Ford's sales dropped 35% and truck sales were down 45%.

Several studies have shown that its take GM, and especially Ford, longer to replace their old model lines with new vehicles while Toyota does it as quickly as any large car company in the world.

With new 2007 models coming into dealers, and 2008 models being discussed and selectively shown to the public, a six month window with slower vehicle introductions may be the respite that Detroit needs to play a little catch-up.

Douglas A. McIntyre can be reached at He does not own secutities in companies that he writes about.

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