Toyota's FY 2014 Profits Rise As Yen Weakens
Aside from holding onto its global sales crown for another year, Toyota is also doing well at the bank thanks to a weaker yen.
The New York Times reports in Q3 2014, the automaker earned a net profit of ¥1.73 trillion ($14.7 billion USD), besting its earnings in Q3 2013 by 13.2 percent. In turn, the final net profit for FY 2014 has been raised from a projected ¥2 trillion ($16.8 billion) to ¥2.13 trillion ($17.9 billion).
Part of the cause for celebration is due to a weaker yen, the result of Japan’s central bank doing all it can to fight deflation and stimulate the economy to stave off another lost decade. Toyota’s global profits — especially in the United States, where the yen is the cheapest it’s ever been since the 1970s — outpace those in the local market once the other currencies are converted into yen.
However, the celebration won’t last forever. Toyota’s home market is shrinking, and it’s not doing so well in China compared to other automakers like Volkswagen, who will likely take the production crown from the automaker down the road. It also is among those affected by Takata’s airbag recall crisis, though not as greatly as others due to having less of the supplier’s products in its vehicles and larger size.
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
More by Cameron Aubernon
Comments
Join the conversation
Shhhhh. You hear that. That sound is Mazda in the black...atleast for a little longer. Please hurry up and move most of your production to Mexico.
Toyota has it's sights on overtaking Ford in the US a very achievable goal
it's been about six months or more since Toyota called a moratorium on building new plants for the time being. The old editor here, Bertel Schmitt, runs Daily Kanban and has been updating Toyota's corporate utterings there, just as he used to do here on TTAC. Toyota has some crazy utilization factors in the order of 90%, but sees no point in overextending itself in what it considers a global down market. No new factories before March 31 2016. Unlike megomaniacal VW, intent on popping its own cork, and struggling to pay for MQB, but wants the world lead anyway. VW is trying to save $5 billion a year, Toyota projects $23 billion profit for the current fiscal year ending this quarter. Who's smarter? who actually makes decent reliable boring cars that draw repeat customers, without playing the pyramid game? As for overtaking Ford in the US, sure it's possible, when Toyota has the capacity to do so. They are going to have to increase Camry production somehow after Fall 2016 anyway, when Subaru kicks them out of their Indiana plant where 100,000 beigemobiles are made each year.
In contrast to the previous post, the REAL 800 lb. gorilla in the room is the end of the Baby Boomer's domination of the car market, at least in North America. Once the majority of my cohort enters assisted living, watch Toyota's (and several others') fortunes change. I'm no VW lover, but I believe they have the Gen X, Y and Millenial mind-share working for them. As these people get into their prime earning years, they will not want to drive what their parents drive, much like the Boomers didn't want to drive Dad's Oldsmobile. While this is totally unscientific, most of the X'ers, Y'ers and Millenials that I come in contact with are nuts about German cars, VWs, Audis, BMWs, Mercs. They consider these to be the gold standard upwardly mobile mobiles to aspire to, old fart Baby Boomer's opinions notwithstanding.