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Toyota president feeling the heat as profits decline
Earlier this year we reported that Toyota had been toppled as the world’s largest automotive manufacturer, making way for Volkswagen AG. According to Toyota Motor Corporation President Akio Toyoda, the brand is now experiencing a sense of crisis due to a decline in profits.
Widely attributed to an instability of foreign exchange rates and increased costs of development, Toyota’s fourth fiscal quarter operating profits (until 31 March 2017) had tumbled by 20% to R532 billion, while net income fell by 6,6% to R483 billion, Automotive News reports.
Revenue, on the other hand, increased by 6,8% to R902 billion. This after global retail sales (including Lexus, Daihatsu and Hino) increased by 3,1% to 2,5 million units in the first quarter. Yet the slump experienced in the final quarter had a detrimental effect, thus ending its full-year profit streak from previous years.
In terms of the full fiscal year, operating profits had fallen by 30% to R346 billion with a 21% net income drop to R280 billion. This equated to a total revenue decline of 2,8% to R2,2 trillion; despite seeing a global retail unit sales increase of 1,6% to 10,3 million units and a worldwide wholesale delivery advance of 3,3% to 9 million units.
Speaking at the full-year results conference on Wednesday, Toyoda-san expressed concern as the company is likely to experience a second consecutive year of falling profits.
“I feel a strong sense of crisis about whether or not we are actually executing car-making from the perspective of the customer in all Toyota workplaces, from development, production, procurement and sales, all the way to administrative divisions,” Toyoda said.
This bears a slight similarity to Gazoo Racing chief, Tetsuya Tada’s comments regarding previous products from Toyota being somewhat dull.
Toyoda-san expressed support towards the more exciting vehicles currently being produced by Toyota; this includes the new C-HR, which makes use of the Toyota New Global Architecture. Despite this, he adds that the company needs to improve the competitiveness of these vehicles.
As mentioned before, profits were weakened by a struggling exchange rate which constituted towards R114 billion of losses. Increased research and development into the TNGA, among other projects, contributed to an additional loss of R64,2 billion.
Although Toyota saw an increase of sales in Japan, it experienced a decline in the North American and European markets. Despite this, North America remains Toyota’s largest market with 2,8 million units sold in the last fiscal year.
http://www.carmag.co.za/news_post/toyota-president-feeling-the-heat-as-profits-decline/
Earlier this year we reported that Toyota had been toppled as the world’s largest automotive manufacturer, making way for Volkswagen AG. According to Toyota Motor Corporation President Akio Toyoda, the brand is now experiencing a sense of crisis due to a decline in profits.
Widely attributed to an instability of foreign exchange rates and increased costs of development, Toyota’s fourth fiscal quarter operating profits (until 31 March 2017) had tumbled by 20% to R532 billion, while net income fell by 6,6% to R483 billion, Automotive News reports.
Revenue, on the other hand, increased by 6,8% to R902 billion. This after global retail sales (including Lexus, Daihatsu and Hino) increased by 3,1% to 2,5 million units in the first quarter. Yet the slump experienced in the final quarter had a detrimental effect, thus ending its full-year profit streak from previous years.
In terms of the full fiscal year, operating profits had fallen by 30% to R346 billion with a 21% net income drop to R280 billion. This equated to a total revenue decline of 2,8% to R2,2 trillion; despite seeing a global retail unit sales increase of 1,6% to 10,3 million units and a worldwide wholesale delivery advance of 3,3% to 9 million units.
Speaking at the full-year results conference on Wednesday, Toyoda-san expressed concern as the company is likely to experience a second consecutive year of falling profits.
“I feel a strong sense of crisis about whether or not we are actually executing car-making from the perspective of the customer in all Toyota workplaces, from development, production, procurement and sales, all the way to administrative divisions,” Toyoda said.
This bears a slight similarity to Gazoo Racing chief, Tetsuya Tada’s comments regarding previous products from Toyota being somewhat dull.
Toyoda-san expressed support towards the more exciting vehicles currently being produced by Toyota; this includes the new C-HR, which makes use of the Toyota New Global Architecture. Despite this, he adds that the company needs to improve the competitiveness of these vehicles.
As mentioned before, profits were weakened by a struggling exchange rate which constituted towards R114 billion of losses. Increased research and development into the TNGA, among other projects, contributed to an additional loss of R64,2 billion.
Although Toyota saw an increase of sales in Japan, it experienced a decline in the North American and European markets. Despite this, North America remains Toyota’s largest market with 2,8 million units sold in the last fiscal year.
http://www.carmag.co.za/news_post/toyota-president-feeling-the-heat-as-profits-decline/
