MIDLAND -- 2010 has shaped up to be an ugly year for Japanese automakers so far, with Toyota issuing recalls of more than 8.5 million vehicles for sudden acceleration, brake problems and other issues. Honda launched recalls as well. Dr. Tim Nash of Northwood University said the recall will hurt in the short term.
“Do I think this will affect the bottom line for Toyota? Yes. Will they be less profitable in 2010 than in 2009, in all likelihood the answer is yes,” he said.
The recalls may cost Toyota more than $2 billion dollars, along with lawsuits and looming Congressional hearings. Nash said that may actually help American automakers like Ford Motor Company, which already gained market share in 2009.
“It’s an opening for the Big Three but it’s not a guarantee that the Big Three can seize that market share,” he said.
Analysts say Ford got on the right track through tough reforms directed by president and CEO Alan Mulally. He spoke with NBC25 about some of those reforms at the North American International Auto Show in Detroit last month.
“We divested Aston Martin, Jaguar and Land Rover and we are in the process of selling Volvo. What that allowed us to do is focus on the Ford brand which is 90 percent of our business,” he said.
Ford also focused on quality as a big part of their message for 2010. Nash said General Motors and Chrysler must have the same focus to be successful, despite the recalls ordered by Japanese automakers.
“They need to sell that value proposition,” he said. “When you look at the defects, the styling and look at them relative to price, American automobiles are as good if not better than anything on the market.
