A strong quarter and an impressive forecast have brought the spotlight back on Toyota Motors
Driving beyond U.S. shores
An integral part of Toyota's global vision is to derive half of its total sales from emerging markets by mid-decade. The company doesn't seem satisfied with the three million units it is selling annually in these markets currently. To push sales up by another one million by 2015, it is planning eight small cars for these markets, including the Etios that it launched in India in 2010.
Toyota derived 18% of its total unit sales from Asia alone in 2011 -- a region that is set to become a critical market for the company, not just for cars but also for production of auto parts and research and development initiatives. Why is Toyota so keen on the emerging markets?
A strategy to gain lost ground
Once the world's biggest automaker, Toyota was knocked off its perch by General Motors
The first quarter was a huge step in that direction for Toyota. It sold more cars than GM, bagging the top automaker slot once again. But maintaining the position won't be a cakewalk, which is why the company wants to strengthen its foothold in some of the fastest-growing markets of the world even while the U.S. car market gathers steam. Not a bad idea, considering the huge potential these markets have.
Bundle of opportunities
China, for instance, is the world's biggest car market. And with the number of billionaires and millionaires rising manifold in the past two years, the story could only get bigger.
The auto industry accounts for a fifth of Brazil's industrial economy, and is currently the third largest in the world. While sales are slowing down a bit, Brazil remains an important car market, and the government will likely take necessary steps to boost auto investments.
India, primarily a small car market, is attracting almost every player in the industry. Currently the sixth biggest car market in the world, India has the potential to climb up to third place by the end of the decade according to a McKinsey report. No wonder then that GM and Ford
The Foolish bottom line
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Neha Chamaria does not own shares of any of the companies mentioned in this article. The Motley Fool owns shares of Ford Motor. Motley Fool newsletter services have recommended buying shares of General Motors and Ford Motor. Motley Fool newsletter services have recommended creating a synthetic long position in Ford Motor. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.