The Big Three aren’t the only ones facing executive compensation cuts. Toyota has announced that management bonuses will be cut by 10 percent as the economic slowdown hits the automaker hard, including within its home market in Japan.
Toyota has grown to become the world’s largest automaker in the wake of falling sales and profits at General Motors. Los Angeles Toyota dealers‘ believe that popular fuel-efficient models such as the Prius have helped Toyota remain competitive while global auto sales continue to slide. But with stalled sales in North American, Europe, and Japan, Toyota is forced to cut bonuses for about 5,000 managers.
While sales slump in mainstream markets, and even up-and-coming markets such as China, Toyota and others are eager to trim costs whenever possible. With sales occurring at a slower pace, inventory is building up at dealers across the country and automakers are scaling back production efforts. While new cars are stalling, Toyota accessories and parts businesses are faring slightly better as drivers are putting more money in their existing Toyota’s rather than purchasing entirely new cars.
Toyota has also said they will cut assembly lines in Japan to help align production with current demand and consumer spending. The lines produce models from the premium Lexus brand, including the LS, GS, and IS.
Sales in the Japanese market have not only affected Toyota, but have also caused losses at Nissan and Honda as well. Lexus in particular has faced a 24 percent decline in sales this year in Japan, while they also continue to fall in the brand’s main market, the US.
Toyota had previously tweaked its sales forecasts, estimating far lower sales than initially estimated in the earlier part of the year. Albuquerque Toyota dealers and others were also eager to hear that the automaker has also established an internal committee whose goal is to improve short-term profitability during the adverse economic climate, which hopefully will prevent the automaker from falling into the same precarious financing situation that the Big Three have found themselves in recently.
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Find the Toyota corporate information here.
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