By on May 8, 2013


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.IMG_2398

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.

A few weeks ago, we predicted 10.06 million units for Toyota’s calendar year.

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.

IMG_2495Toyota 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
Toyota $9.73 $13.36 9,909,440
GM $4.86 $7.86 9,489,000
Volkswagen $28.45 $15.08 9,070,000
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.

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12 Comments on “Toyota Officially Wants To Make More Than 10 Million Units This Year – Very Carefully...”

  • avatar

    I don’t know how in the world it is possible for VW to have a net profit ($28.5 BB)that is $13 BB more than their operating profit ($15.1 BB) unless they had some hellacious tax loss carry forwards or tax credits.

  • avatar

    “Like no other carmaker, Toyota went through a series of gruesome catastrophes that would have brought many others to their knees.”
    Didn`t Honda have the same problems? I thought the flooding affected them even more. The yen, earthquake, fight over the islands and electricity issues were the same for them and Toyota.

    Also $1.5 billion from FOREX is hardly pocket change.

    • 0 avatar

      Hmm. Suddenly, sudden acceleration, disguised as “the recalls” is forgotten? Toyota did not forget last year’s billion dollar settlement that enriched U.S. lawyers, they mentioned it again today. Without it, profits would have been a billion higher ….

      • 0 avatar

        My mistake, I had forgotten the UIA recall issue. Which hopefully shows it was a shortlived issue with a one time cost. They did have many legitimate recalls too in that time.
        However that is just one issue and was hardly the most important – I would have said the earthquake, reduction in electrical power, high yen, flooding in Asia and the issue with China all rank higher than a “recall” issue in America (and not in any other markets).

  • avatar
    Athos Nobile

    How come VW’s net profit is bigger than its operational profit?

  • avatar

    Great title:

    “Toyota Officially Wants To Make More Than 10 Million Units This Year – Very Carefully”

    Carefully enough, one hopes, to correct the rather egregiously poor fit and finish of the current Camry’s dashboard. You know, using only the production facilities they already have.

    • 0 avatar

      “the rather egregiously poor fit and finish of the current Camry’s dashboard”

      That ain’t all that’s wrong with the current Camry. Long-time Camry buyers have told me that since Toyota quit importing Japanese-built Camrys into the US, they won’t be buying another Camry.

      The Altima seems to draw a large number of former Camry buyers, as does the Sonata.

      • 0 avatar

        Isn`t the Sonata made in North America?

        • 0 avatar

          mike978, yes it is.

          Both the Altima and the Sonata are siphoning off a number of former Camry buyers, because they are both better buys for the price and for the money, with none of the current and former hassles of the Camry.

          A friend of mine with a Japan-built 1989 Camry V6 LE is currently evaluating the merits of buying either an Altima or a Sonata, to replace it.

          I have urged him to evaluate the new Accord as well and add it to the mix of choices in sedans, and maybe even a Pentastar Chrysler 300 since he can well afford it.

          Were I in the market for a sedan, the Sonata would be my number 1 choice because of the value it represents for the money. And I told him that.

          I also added that for just a little more money he could add a Pentastar Chrysler 300 with that magnificent eight-speed automatic to park next to his 2012 Grand Cherokee Laredo, and not have to suffer the mind-numbing rubber-band indignities of a CVT transmission.

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