By now, most of you who care about these things are aware that Toyota today announced an annual net profit of $9.73 billion for the fiscal that ended on March 31, more than three times of what the company made in the year before. By now you probably heard that the “weaker yen” is the reason. Not really, says Toyota, claiming that “effects of FOREX rates” added only $1.5 billion to the bottom line. There is another number you may not have heard.
Buried in the supplemental materials, handed out at 3pm in the packed basement conference room at Toyota’s Tokyo HQ, is the news that for the first time, Toyota budgets to cross the 10 million unit mark this fiscal. According to its plans, Toyota wants to sell 10.1 million units this year, including Lexus, Daihatsu and Hino, and, often a source of confusion in the past, but no longer this time, including China. China is looking a bit better after emotions over the islands have cooled down a bit. April sales in China were at 93 percent of their previous year levels, I hear today, and with a few new and sorely needed products, Toyota wants to sell more than 900,000 units this fiscal in the Middle Kingdom.
If Toyota delivers this plan (and they usually budget like a porcupine having sex – very carefully) it would be the first auto manufacturer in the world to cross the magical 10 million unit line.
Toyota is even more careful when it comes to bricks and mortar. Other than some OEMs who build new factories faster than cars, overcapacities elsewhere be damned, Toyota wants to use what it has. It will stick with building planned factories such as in Thailand and Indonesia. It may add a little capacity here and there, but otherwise: “No new factories,” its CEO Akio Toyoda says today.
Whenever we talk about production volumes and new records, there are the usual comments that what counts is profits, not volume. Toyoda agrees. “Growth is not the same as the expansion of sales volume,” says Toyota’s CEO today. “Some may think that now is the time to get aggressive. However I think that we are just about to start our sustainable growth.”
Like no other carmaker, Toyota went through a series of gruesome catastrophes that would have brought many others to their knees. What did not kill it, made Toyota stronger. It also taught it to plan for other catastrophes.
|Big 3 Comparison|
|Net Profit (billion)||Operating profit (billion)||Units CY 2012|
|Financial data: GM, VW: Year ending 12/31/2012|
|Toyota: Fiscal ending 3/31/2013|
For those who advocate that profits are more important than volume, here is a handy table with volumes for the last calendar year and profits for last year’s reporting period. In case you wonder about Volkswagen, refresh your memory here.