B&E’s Karan Mehrishi dives deep into the auto quagmire and gasps for breath...
But it’s not as if GM’s alone in the bloodbath. Ford is not too far behind when it comes to sharing in the scathing hits. When William Clay Ford Junior gave an interview to Planman Media a couple of years back, he had just entered India and was typically gung-ho about cutting it clean very soon. In the first week of August 2008, Ford reported the biggest and worst one quarter loss (April to June 2008) in the history of the corporation! $8.7 billion! Year 2007 loss: $2.7 billion! Year 2006 loss: $12.6 billion!
Not surprisingly, while annual sales have regularly fallen or remained stagnant at GM (2006: $205 billion sales; 2007: $181 billion; 2008 six months: $80.6 billion) and Ford (2006: $160 billion; 2007: $172 billion; 2008 six months: $85 billion), the sales at Toyota (2006: $179 billion; 2007: $202 billion; 2008 six months: $118 billion) and Honda (2006: $84 billion; 2007: $94 billion; 2008 six months: $54 billion) have been constantly rising. But more importantly, companies like Toyota and Honda have raked up humungous profits year after year! Toyota had profits of $11.6 billion, $14 billion and $6.18 billion in 2006, 2007 and the first six months of 2008. While Honda, during the same periods, had profits of $5 billion, $5 billion and close to $2 billion!
Compared to the accumulated profits of $44 billion in the last three years of the fuel-efficient focused Japanese Big 2, the Detroit Big 2 had accumulated losses of a mind numbing $82 billion in the same period!!! What gives?!?! That’s when I came across four extremely critical issues that could surely define the reasons why the global auto industry dies sooner than later...
But it’s not as if GM’s alone in the bloodbath. Ford is not too far behind when it comes to sharing in the scathing hits. When William Clay Ford Junior gave an interview to Planman Media a couple of years back, he had just entered India and was typically gung-ho about cutting it clean very soon. In the first week of August 2008, Ford reported the biggest and worst one quarter loss (April to June 2008) in the history of the corporation! $8.7 billion! Year 2007 loss: $2.7 billion! Year 2006 loss: $12.6 billion!
Not surprisingly, while annual sales have regularly fallen or remained stagnant at GM (2006: $205 billion sales; 2007: $181 billion; 2008 six months: $80.6 billion) and Ford (2006: $160 billion; 2007: $172 billion; 2008 six months: $85 billion), the sales at Toyota (2006: $179 billion; 2007: $202 billion; 2008 six months: $118 billion) and Honda (2006: $84 billion; 2007: $94 billion; 2008 six months: $54 billion) have been constantly rising. But more importantly, companies like Toyota and Honda have raked up humungous profits year after year! Toyota had profits of $11.6 billion, $14 billion and $6.18 billion in 2006, 2007 and the first six months of 2008. While Honda, during the same periods, had profits of $5 billion, $5 billion and close to $2 billion!
Compared to the accumulated profits of $44 billion in the last three years of the fuel-efficient focused Japanese Big 2, the Detroit Big 2 had accumulated losses of a mind numbing $82 billion in the same period!!! What gives?!?! That’s when I came across four extremely critical issues that could surely define the reasons why the global auto industry dies sooner than later...
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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