No. 442: What does Aqua’s success mean? (February 20, 2012)

Business trend

Toyota introduced its hybrid car Aqua on December 26 last year, and Aqua collected orders for about 120,000 units as of January 31, 2012, in just one month after the introduction. Aqua is Toyota’s second fastest selling vehicle following Prius that collected orders for about 180,000 units in one month in 2009. Because Toyota projected monthly sales at 12,000 units, every customer needs to wait for at least five months before he gets his Aqua. What is more interesting is that males account for nearly 70%, and males older than 50 account for more than 40% of all males who placed an order, showing how conservative consumers have become because of the dwindling domestic business climate.

Panasonic that announced miserable results is reported to make even strenuous efforts to build a highly profitable business structure by 2015. The Japanese electronics business is traditionally characterized by vertical integration and self-sufficiency, but the clumsy response of the government and the fast-changing global business environment made it impossible for electronics companies to manage the business without drastic reform. In fact, it will surely take Japan much time to work out effective measures for the six negative factors: highly appreciated Japanese yen, heavy corporate tax, government’s slow response to free trade, regulations on labor, constraints imposed by environment concern, and power shortage. Toyota and Panasonic are the two champions that represent the Japanese industry. The two companies show how important it is to construct a highly profitable business structure in whatever industry a companies is doing business.