By on May 9, 2012

As I walk into Toyota’s basement-bunker Tokyo conference room for the annual results conference today, the Toyota people are all smiles. Genuine smiles. Not the frozen polite smiles so common in Japan. Happy, relaxed smiles. Looking in their faces, I read that this will be a day of good news.

Today’s amazing story number one is that Toyota made a profit at all. Profit before taxes was 432.9 billion yen ($5.4 billion). That’s not as high as last year’s number (563.3 billion yen, or $7.1 billion.) Considering that the March 11 earthquake and tsunami had hit Japan with the force of 31,250 Hiroshima-Nagasaki nuclear bombs (if some scientists are right,) considering that Japan’s production hub in Thailand had been under water for months, and considering that the high yen turns exports from Japan into a loss-making exercise, the fact that there was a profit at all is short of a miracle.

Toyota CEO Akio Toyoda regales the audience with a Charlie Chaplin story. Asked which of his films was the best one, Chaplin answered: “The next one.” The next year is today’s most amazing story number two. Toyota expects a trillion yen in operating profits when this fiscal year is over, which will be on March 31 2013. Currently, a trillion yen are worth $12.6 billion.

Toyota wants to do this the old fashioned way. Again and again we hear today that Toyota wants to  develop better cars which increase sales and profits which then can be reinvested into developing more better cars. At the same time, Toyota wants to cut costs and eliminate waste.

Toyota sticks to its plan to keep production for 3 million cars in Japan. That’s a holding action, expansion will be elsewhere. Toyota sees  half of its sales in emerging markets in the near future. Instead of cars, jobs will be exported. Or rather, as CFO Satoshi Ozawa calls it, “human resources will be reallocated to emerging markets.” Toyota currently makes most drivetrains at home. This will also change. Toyota is looking at ways that makes production of engines in lower volumes profitable, “which allows us to deploy engine production to emerging countries as well,” says Ozawa.

As far as the production and sales volume goes, Toyota reiterates the 2012 sales plan published in February. Actually it increases it slightly, from 8.58 million units for Toyota and Lexus alone to 8.7 million units. Leaving the numbers of Daihatsu and Hino what they were, the new plan now calls for 9.7 million units. That’s for the fiscal year (April to March), not for the calendar year.

Toyota always budgets carefully. As noted yesterday, piercing the 10 million mark in  this year is absolutely doable as long as there is “a peaceful and normal year,” as Akio Toyoda hopes .

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20 Comments on “Toyota Survives A Year Of Disasters, Anticipates Big Reward...”

  • avatar

    I love the Darth Vader helmet behind Toyoda San. Oh wait, that’s the new Lexus design language.


  • avatar
    schmitt trigger

    Got to give credit to the Japanese….they work the best when faced with apparently insurmountable problems.

    • 0 avatar

      I have the utmost respect for the Japanese people and their culture in general. You should google “japan tsunami before and after pictures”. What the accomplished in less than 1 year (when a lot of the pictures were taken) is truly mindblowing.

      • 0 avatar

        One of my sons is married to a Japanese lady (not a US citizen and will never become a US citizen) with relatives directly affected by the tsunami, flood and nuclear disaster.

        If Katrina was bad for us in America, imagine a disaster exponentially worse than Katrina. There is no other way to describe it.

        Fortunately for them, their Japanese government has done more for them than the US government did for the victims of Katrina. But it cannot offset the grief and loss they experienced.

        I hope that Toyota will make a complete recovery and assume its rightful place at the head of the global auto industry. They certainly earned it.

        The disasters in Japan and Thailand were not the only thing that Toyota had to cope with. In America Toyota received a beating that it did not deserve and everyone knew that Toyota did not deserve that beating before the beating started. The inevitable outcome only confirmed what everyone already knew.

        Akio Toyoda humbled himself before the American people when he had no reason or cause to do so. I would like to see Toyota pull all its plants out of America and move them to Mexico, or even Canada. That would certainly repay the UAW and the US government for the kindness and hospitality they have shown Toyota in America.

  • avatar

    “Toyota CEO Akio Toyoda ‘relegates’ the audience with a Charlie Chaplin story.”
    Did you mean to use the word ‘regales”here?

  • avatar

    THAT is where Toyota’s greatness has come from: they genuinely want to build good automobiles. As I said yesterday, Watanabe lost that plot. It it’s good to see that it’s back and successful.

    A big story here is that they are following their tradition of not laying people off, even in a brutal currency situation. Continuing to build 3 million cars per year in Japan is not the path to highest short term profit. It’s a path taken to maintain employee trust and good corporate stewardship.

    I may not want to buy a lot of Toyota vehicles, but I sure admire the company. The world would be a better place if more were like them.

    • 0 avatar

      +1 to your last paragraph. I admire their consistency. Now if they could just make their mainstream vehicles more interesting we would be golden. No reason why reliability and good driving dynamics need to be mutually exclusive.

      • 0 avatar

        I always though it was maintstream and interesting that were mutually exclusive. Reliability and interesting have never had problems with one another…

    • 0 avatar

      In contrast to the sullen character in Gran Torino who hates everything manufactured by “those gooks” :-)

      • 0 avatar

        Get off my lawn!

      • 0 avatar

        I’m pretty sure the derogative for Japanese people is “Nips.” “Gooks” are Korean (according to my grandfather, at least).

      • 0 avatar

        In the interest of not ruffling feathers more than necessary, correspondents are asked to curb the use of culturally insensitive terms.

        I asked TTAC’s cross-cultural advisor, Frau Schmitto-san, what bothers her more, “Nip”, “Jap”, or “Gook.”

        Answer: “Never heard of nip. Never heard of gook. Jap is mildly upsetting. Just don’t call me a yellow monkey – if you want dinner tonight.”

        Nevertheless, I recommend that correspondents edit their epithets.

  • avatar

    Everyone can learn a lesson from Toyota. Build a better mousetrap. Adapt to conditions rather than complain about barriers. The public doesn’t want the holy grail, they want something a bit better than the competition, priced fairly.

    I think a while ago the Western media said the “Toyota method” is dead.

    Is it?

    • 0 avatar

      “Is it?”

      I would think not. Who out there is competing with Toyota right now from a business standpoint? Volkswagen maybe? Please, no one embarrass themselves citing GM. Until you remove the black mark of the government-funded get-out-of-jail free card, they’re not even in the race.

      I’m hoping with Akio Toyoda at the helm, we’ll see a similar turnaround as when Bill Ford took over at the blue oval. Someone who’s saying “This isn’t just a company – you’re fucking with my family name.”

      I love Toyota’s reliability. It counts for a lot when your vehicle is nigh unkillable even when neglected. I haven’t loved most of their recent designs or interiors, but I’ve stuck with them because I can’t get 250,000 trouble-free miles out of anyone else.

      A few improvements in interior accoutrement and they could be back among the “excellent value” discussion, much like Hyundai is now.

    • 0 avatar

      It’s not dead but its existence is questionable in some ways. As Toyota expands, they are coming up with more and more unusual vehicles all in the name of satisfying a given market. Some cars released in the SE Asia by Toyota would never make it elsewhere, so in essence the identity of Toyota (the Japanese nimbleness, refinement and quality) is under threat. For example, the Toyota Etios released for the Indian market is the ugliest car ever released by the company, with nary a resemblance to any other Toyota product on the market. So then, methinks the consumers in that region are getting shafted by what is essentially Toyota-branded but without the soul.

      • 0 avatar
        Athos Nobile

        “So then, methinks the consumers in that region are getting shafted by what is essentially Toyota-branded but without the soul.”

        I don’t think they’re getting shafted. Instead they’re getting a product tailored to their needs/possibilities, which is consistent with the “Toyota method”: satisfy the customer.

        I don’t think the Toyota method is going to be dead even in a long time. And that is because that “method” is constantly learning and evolving from previous experiences.

  • avatar

    Akio Toyoda is a beast.

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