As a weak yen offers Japanese automakers an advantage against competition from around the world, a slowing demand and political tensions in China are evening the score as the 2014 auto market takes shape. Bloomberg reports that Toyota’s (NYSE:TM) president and CEO sees less-than-ideal results ahead in the world’s fastest growing auto markets as his company watches Ford (NYSE:F) overtake the Toyota brand in two crucial countries.
Toyota, the world’s leading automaker in sales, encountered problems in the past few years that had little (if nothing) to do with the cars and trucks it showcased in emerging markets. Political tensions between Japan and China have sparked boycotts of automakers from Toyota to Honda (NYSE:HMC) and Nissan (NSANY.PK) in the world’s biggest auto market, a trend that may continue in 2014. At the end of December, the Japanese prime minister’s visit to a war shrine drew stern criticism from Chinese government officials.
Tensions of this nature allowed Ford to move in front of Toyota as the fifth best-selling brand in China in 2013. Other trends that worked against Toyota included a desire for car consumers to get increased style and performance out of small cars. The midsize Ford Fusion and the Ford Focus — the best-selling car in China and across the globe — delivered those attributes. However, Toyota CEO Akio Toyoda acknowledged simple realities about emerging market trends.