Summit Notebook

Toyota’s Arashima on Reuters Financial Television

Toyota Motor Europe President and CEO Tadashi Arashima talked to Reuters Financial Television during the Auto Summit in Paris. See here.

Toyota will not freeze out Iceland, bets on Russia bounce

The world’s biggest carmaker, Toyota, will not follow the road of McDonald’s and abandon Iceland even though it is selling ‘very few’ cars there at the moment and its distributor has been seized by the banks as its owner went belly-up, Toyota Motor Europe President and CEO Tadashi Arashima told the Reuters Auto Summit in Paris on Tuesday. “We have a big market share there, of 25 percent, and it is good for our after-sales,” Arashima said. The banks are trying to sell the distributor but Toyota does not plan to take ownership like it does in its key European markets of Germany, France, Italy, Spain and the United Kingdom, and some Scandinavian countries.  

Arashima said he believes the Russian market will recover sooner than many think, after the west European markets but well before the rest of East Europe — in 2011 or 2012.

In West Europe he does not see signs yet of a return of consumer confidence leading people to buy more expensive items such as cars and the showrooms remain quiet.

Europe traditionally had a low priority for Toyota, which mainly focused on the big U.S. market, and Arashima still has problems convincing  headquarters in Toyota City that Europeans like diesel engines which are far from popular in Japan and the States.

It now produces cars in Britain and France and makes some 60 to 70 percent of its sales locally.

But the Lexus luxury brand is not really taking off in Europe as it competes with German rivals that have diesel, and has rather big engines that Europeans have started to dislike.

In the U.S. however, big is still beautiful. “Even though Americans drive slowly they still love big engines,” Arashima said.

AUDIO – The ‘new normal’ for the U.S. auto industry

A few years ago, one of the guests at our annual Reuters Autos Summit — Tom Stallkamp from Ripplewood — pretty much stopped everyone dead in their tracks by predicting that auto sales in the United States was likely to fall to an obscenely low level of 14.5 million.

Those were the days.

Of course, Stallkamp was making that prediction at a time when U.S. car manufacturers were selling in the neighborhood of 16 to 17 million a year. If the number hits 14.5 million in 2010, people will be wild with enthusiasm as most now expect something in a range of 10 to 11 million.

That would be about flat to a little higher than sales this year.

On the first day of Reuters annual sojourn to Detroit for the Reuters Autos Summit, defining what the “new normal” is going to be for everything about the auto industry is much on everyone’s mind. What will happen with the big manufacturers, the dealerships, the suppliers.

It’s a lot to assess all at once.

Bob Carter, head of Toyota’s U.S. operations kicked things off for the summit by talking about what he sees for the coming year.