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Japanese car makers thrive while U.S manufacturers flounder

Not all car makers are on the brink of financial ruin. Toyota has ousted GM as the planet’s biggest car manufacturer. While no auto maker can evade the effects of a slowing global economy, Japan’s biggest car makers are thriving and investing in their futures.

All car makers across the world are minimizing budgets and decreasing production to compensate for the decreasing consumer demand and tight credit availability. However, Honda, Toyota and Nissan had enough foresight to adapt to changing demands. And they did so several years ago.

U.S. initiated hybrid technology; Japanese car makers followed through.

Although General Motors, Ford and Chrysler were among the top players in a U.S. government initiative to develop hybrid and alternative fuel vehicles in the 1990s, it was Japanese automakers Honda and Toyota who released the first hybrids, the Insight and Prius (respectively) in 1999.

Popularity soared for these two vehicles, and since then U.S. car manufacturers have licensed hybrid car technology from Japanese manufacturers.

Ford, General Motors and Chrysler kept feeding the gas-hungry SUVs

Ford, General Motors and Chrysler (the Big Three), sat on their immediate money making models—gas-guzzling SUVs, pickups and V8s—since smaller hybrids and consumer economically friendly vehicles aren’t as immediately profitable.

In addition, just five years ago GM borrowed $50 million from Canada to set up a production facility and bring back the V8 Camaro. Analysts say they couldn’t (or wouldn’t) see the writing on the wall that their days of fuel-hungry vehicles were numbered.

Japan car makers aren't immune, they're just better prepared for the storm.

That’s not to say Toyota, Honda and Nissan are immune from the U.S. financial weakness. Toyota Motor Corp. (TM) sales are expected to drop 24%, with Honda Motor C. (HMC) sales down 21% and Nissan Motor Co. (NSANY) sliding 20% in November, Edmunds reported. They’re also planning cuts in capacity to compensate by closing a factory in the U.K. and lower production output in Japan and Europe.

But they are better cushioned to face the storm than their American competitors. They, for one, aren’t stepping off their private jets in Washington D.C. with their empty porridge bowls in hand pleading, “Please sir, may I have some more?”

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