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Introduction

This report is based on the survival and profitability of Toyota and BMW during the current global financial crisis. This report is intended to highlight all major facts regarding the progress of Toyota and BMW. Not only will it highlight major facts and figures about BMW and Toyota but it will also give a clear picture about other automakers and the problems being faced by them. The role of the big three i.e. GM Ford and Chrysler. And finally the reason of Toyota and BMW's success even in hard financial conditions globally. The report will be comprised of an introduction, Background and conclusion.

Background

As the global financial crisis hit the local auto market in the second half, the growth for all of 2008 fell sharply. The automotive industry crisis of 2008-2009 is a global financial crisis in the auto industry that began during the latter half of 2008. The crisis is primarily felt in the United States' automobile manufacturing industry and, by extension, Canada, due to the Automotive Products Trade Agreement, but other automobile manufacturers, particularly those in Europe and Japan, are also suffering from the crisis. The global financial crisis is suffocating the Detroit automakers, but the problems at General Motors, Ford, and Chrysler have been festering for years—even when the mighty "Big Three" were earning billions. Aging factories, inflexible unions, arrogant executives and shoddy quality have all damaged Detroit. Now, with panicky consumers fleeing showrooms, catastrophe looms:

The automotive sector was first weakened by the substantially more expensive automobile fuels linked to the 2003-2008 oil crisis which, in particular, caused customers to turn away from large sport utility vehicles (SUVs) and pickup trucks, the main market of the American "Big Three" (General Motors, Ford, and Chrysler). The US automakers also suffered from considerably higher wages than their non-unionized counterparts, including salaries, benefits, healthcare, and pensions. In return for labor peace, management granted concessions to its unions that resulted in uncompetitive cost structures and significant legacy costs. (Strumpf, Dan Pp. 57)

In 2008, the situation became critical because the global financial crisis and the related credit crunch placed pressure on the prices of raw materials.

As of the beginning of 2009, the vehicle companies of the world are being hit hard by the economic slowdown across national boundaries. Car companies from Asia, Europe, North America, and elsewhere have been forced to implement creative marketing strategies to entice reluctant consumers to purchase vehicles, when many firms are experiencing double digit percentage sales declines. However, the BMW Group was, as expected, unable to match the previous year's record earnings in its sales figures for 2008 as a whole. Nevertheless, the company reported only a moderate decrease of 4.3% from 2007's high level. (Morgan, James M. & Liker, Jeffrey K 2008 Pp. 78)

Last year the BMW Group delivered a total of 1,435,876 (prev.yr: 1,500,678) BMW, MINI and Rolls-Royce brand automobiles to customers worldwide. The company thus achieved the second-best sales result in its history, after 2007, and also remained the world's leading ...