JIN-490 -- Bad after good: Toyota's shrinking feeling

Wed Nov 12 12:23:32 JST 2008

-----------------------------------------------------------
Every PBXL wireless phone comes standard with:
a big color screen,
a 03 Tokyo number,
voicemail,
and more!

Everything you expect from the best office phone system
on the market.

Call today! 03-4550-2557
Get your new phone system in 3 steps: http://www.pbxl.jp/plans

PBXL is Hosted Business Telephony
Monthly seminars at Cisco HQ: http://www.pbxl.jp/seminarstt
More about PBXL: http://www.pbxl.jp/aboutus2
-----------------------------------------------------------

J at pan Inc Newsletter
The 'JIN' J at pan Inc Newsletter
A weekly opinion piece on social, economic and political trends
in Japan.
Issue No. 490 Wednesday November 12, 2008, Tokyo

The size of cars seems to be shrinking in equal proportion to the
profits of the world's automakers. On Tuesday, Toyota's IQ mini car
was named as Japan's car of the year. The award, decided by a
committee of 65 auto-industry writers and consultants, came just after
Toyota's stock dropped 17 percent, last week. This was the biggest
decline in 18 years and followed the announcement that the company
would see an operating profit of only $6.9 billion -- a 73.6 percent
decline over last year.

The 1-liter IQ, which costs between 1.4 million yen ($14,300) and 1.6
million yen, may  take customers away from BMW's Mini One, priced from
2.08 million yen, and Daimler AG's twin-seat Smart ForTwo, which is
sold from about 1.76 million yen. Toyota will no doubt try to use the
award to lure customers away from its competitors, particularly in the
lucrative US market that it has, up until now, done so well in.

Toyota has also announced that it will release a $5000 car for the
growing Indian market. It'll be another two years until it hits
showroom floors, however. The motoring giant has up until now been
staying away from the Indian small car market but due to slumping
sales in other markets, it can no longer afford to ignore it.

Recently, much has been made of GM's dire position. While Toyota is by
no means in the same boat, it is under increasing stress due to, as
some analysts have said, it being a victim of its own success.

"Toyota has become used to carrying excessive investment, and this has
left it vulnerable in a downsizing," Takaki Nakasishi, a J.P. Morgan
Securities analyst, told Reuters. "It's important to recognize that
the current steep decline in Toyota's earnings is not only a cyclical
problem -- the downturn has been exacerbated by its own structural
problems."

Toyota has invested heavily in its North American plants allowing it
to push its market share from 7.5 percent in 1990 to present 16.3
percent. But strategic missteps like the introduction of the full-size
Tundra pickup truck in 2007 as US consumers began turning away from
large gas-guzzling SUVs, didn't help.

Due to the fact the company has expanded so heavily, and compounded by
its unwritten policy of refusing to lay off permanent workers, the
economic downturn has hit it harder then some of its rivals. It's
estimated that the policy of keeping idle workers onboard will cost
Toyota $300 million as they twiddle their thumbs as the factories stay
silent.

With the concentrated expansion in the US, the continued strength of
the yen is bad news for the manufacturer as well. On Wednesday the
dollar was valued at 97 yen and some foreign currency experts are
tipping the US dollar to drop when the credit starts to flow freely
again. Meanwhile, the yen is forecast to stay strong which would be
bad news for the manufacturer.

Unlike other overstretched corporations, however, the Japanese
motoring giant does reportedly have about $18.5 billion in cash -- a
comforting fact for investors. The will be no dramatic failing as is
being predicted of GM, but for a company that had looked like it could
do no wrong, it is a dramatic turnaround. It is going to be tough 2009
for Toyota.

Michael Condon.
Editor-in-chief

-------------Japan Inc is worth every penny!---------------

J at pan Inc is Japan's only English-language business magazine.
Authoritatively chronicling business trends in Japan, each
beautifully designed full-color issue brings you in-depth
analysis of business, people and technology in the world's
second largest economy. Don't miss another issue! JPY 8,000
for 1 year (12 issues) JPY 15,000 for 2 years (24 issues)
Visit http://www.japaninc.com/mgz_subscriptions to subscribe.

-----------------------------------------------------------

-----------------------------------------------------------

Creative and Web Services

O Creative provides multilingual creative solutions for
print and web.

Based in Tokyo and London, O Creative specializes in logos
and visual identity, branding, brochures, internal and
external corporate communications solutions, multilingual
web sites, web hosting, IT support, search engine optimization,
online marketing, content management systems and customer
relations management systems.

For more information, please visit our website at
www.o-creative.com,
or contact us directly at info at o-creative.com

-----------------------------------------------------------

------------- Looking for English Magazines? --------------

Subscribe to your favorite English magazines today -- TIME,
Newsweek, National Geographic, Scientific American, People
and many more.

eigoTown.com is now offering subscriptions to English magazines
at great prices.

Visit: http://magazines.eigotown.com
Credit cards and PayPal accepted.

-----------------------------------------------------------

-----------------------------------------------------------
REGISTER TO MIDEM / MIDEMNET BEFORE NOVEMBER 17 TO SAVE 25%
Speaking at MIDEM / MidemNet 2009

* David Eun, VP Content Partnerships, Google Inc
* Jay Marciano, President, Madison Square Garden Entertainment
* J.Y. Park, Founder and President, JYP Entertainment
* Jim Balsillie, co-CEO, RIM/Blackberry
* Amit Kapur, COO, MySpace
* Dr. Tero Ojanpera, EVP, Entertainment and Communities, Nokia

MidemNet: 17 - 18 January 2009 View MidemNet Programme
http://novagenus.com/novacast/elaunch.aspx?I=MidemNet2009A
MIDEM, the world's music market: 18-21 January 2009.
9 000 key professionals from 90 countries

The earlier you register, the less you pay.

Register now at www.midem.com

-----------------------------------------------------------

------------------ ICA Event - Nov 20 --------------------
Topic: Focused on the Bottom Line, Using third party solutions
in Japan for SMEs

Presenter: Tony Fujii - Partner, Fusion Systems
Details: Complete event details at http://www.icajapan.jp/
(RSVP Required)

Date: Thursday, Nov 20, 2008

Time: 6:30 Doors open, Buffet Dinner included, cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members)
Open to all-venue is The Foreign Correspondents' Club of Japan

http://www.fccj.or.jp/aboutus/map

-----------------------------------------------------------