At Toyota's Results Conference: "Next Year, Finally We Can Exercise Our Capabilities in Earnest"

Bertel Schmitt
by Bertel Schmitt

Today, Toyota announced its October-December 2011 results to reporters packed into its basement meeting room in Koraku-en, Tokyo. Like most Japanese companies, Toyota is on a fiscal year that spans from April to March the following year. The reporting quarter was the third of the 2012 fiscal. It was surprisingly good. From October to December, TMC had an operating profit of 149.7 billion yen ($1.95 billion,) up 51 percent to from a year earlier. It gets better …

First, the room has to endure a speech that must have been written in Excel, rattled off by Toyota’s Senior Managing Officer Takahiko Ijichi (right.)

His Managing Officer Shigeru Hayakawa must have read the speech before. He uses the time to nod off concentrate intently. High suspense: We hear complaints that the government had taken a bigger bite of that profit due to “tax reform,” slashing the net profit to 80.9 billion yen.

Hayakawa-san continues to listen intently. We hear that when the fiscal ends on March 31, TMC will likely have an operating profit of 270 billion yen ($3.5 billion), and a net profit of 200 billion yen ($2.6 billion.) “The other guys are doing much worse,” whispers a reporter next to me. Indeed, today the Nikkei dips on announcements that other Japanese companies will report rotten numbers three months from now. Less than a year ago, large parts of the country were smashed to bits, what do you expect? I definitely expected losses.

What really puts a fire under the room`s imagination is when Ijichi talks about how resolutely Toyota has been and is digging itself out if the triple whammy caused by the Tohoku tsunami, the Thai flood, and the towering yen.

Suddenly, what had sounded like an ambitious plan, namely that Toyota wants to raise its 2012 global sales by a whopping 21 percent to 9.6 million, begins to sound believable.

For 2012, Ijichi cites projections of the Japanese Auto Manufacturers Association JAMA that put the total Japanese market at 5 million this year. He thinks that it is not unreasonable when “we expect our market to be 1.63 million units including minivehicles.” For the Toyota/Lexus brand alone.

In the U.S., Toyota conservatively projects the total market to be 13.6 million, and, says Ijichi, considering that “we are going to introduce 19 models this year, we are planning to sell 1.9 million units in the North American market.”

Intentional slip of the tongue to hedge his bets? Toyota sold 1.64 million cars in the U.S. alone in 2011, after 1.76 million the year before. Together with Canada and Mexico, Toyota was pretty close to 1.9 million units last year in North America.

Europe is difficult to forecast, says Ijichi. But he aims to lift China from 880,000 units last year “to at least one million units … or more than that.”

Edmunds noted yesterday that “Toyota is still faced with supply issues; it averaged 33 days to turn in the last quarter, which is about half of the industry ideal of 60 days to turn.” Contacts at Toyota confirm this and say it will last through this quarter. After March, all dealers are expected to be fully stocked.

Hayakawa-san is wide awake when the usually dry and buttoned-up Ijichi takes a deep breath and declares in closing:

“In the past several years, our marketing people and our production people had encountered many hardships. They could not produce as they wanted and they could not sell as they wanted. Next year, finally we can exercise our capabilities in earnest.”

Mind, you, in Toyota’s calendar, “next year” begins this April.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Mike978 Mike978 on Feb 07, 2012

    Where do they expect to get the 21% increase in sales? Europe as stated will probably be flat, the US/North American market (depending on if it was a slip of the tongue) will be 0 to perhaps 10%. China is estimated to grow by at least 13%. What is the prediction for Japan? Also the ROW will have to grow by much more than 21% to cover Europe and North Americas relative under performance. Any information would be appreciated. I also thought Toyota could exert their capabilities in calendar 2009 and 2010. The natural disasters were a 2011 (and into Q1 2012) issue. Has the yen been an issue for a prolonged period?

  • I_godzuki I_godzuki on Feb 07, 2012

    From Yahoo Finance: GM market cap $40.1 billion Toyota market cap $124.82

  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
  • 3-On-The-Tree Son has a 2016 Mustang GT 5.0 and I have a 2009 C6 Corvette LS3 6spd. And on paper they are pretty close.
  • 3-On-The-Tree Same as the Land Cruiser, emissions. I have a 1985 FJ60 Land Cruiser and it’s a beast off-roading.
  • CanadaCraig I would like for this anniversary special to be a bare-bones Plain-Jane model offered in Dynasty Green and Vintage Burgundy.
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