Now, the good news for Toyota
BY IAN PORTER | 5th Aug 2010
Toyota, the world’s largest motor manufacturer, posted a 27 per cent surge in sales revenue around the world, also indicating it has shrugged off the worst effects of a string of recalls totaling 11.2 million vehicles in the past year.
And, what’s more, the group has strengthened already bullish forecasts for the full year.
The strong performance overseas was mirrored in Australia, where president and chief executive Max Yasuda told GoAuto that there had been little customer backlash in the wake of the recall dramas overseas, at least not yet.
While sales of the locally made Camry hybrid were below initial targets, Mr Yasuda said customer loyalty in Australia had not been affected.
“The recalls we have made around the world have had much less impact in Australia than we thought,” he said at a ceremony to honour the company’s first dealer to receive a Five Star Toyota Environmental Dealer award. “Our customers are very loyal to our products.
“Our retention rate – buyers who purchase a subsequent car – is higher than before.
“That’s very, very impressive. It has not dropped during this whole period of the recalls.”But there is still some anxiety about the possible longer-term effects, Mr Yasuda admitted.
“My concern is about the people who have never had experience of Toyota products in the past,” he said. “It is possible they will not buy a Toyota in future. We don’t know.”
Mr Yasuda also played down any concerns he may have about the reception buyers have given the locally-made Camry Hybrid since its launch earlier this year.
“I am not disappointed. We expected it would have a slow start,” he said. “It will take time for customers to understand the car.
“We have to do a better job of communicating the benefits of the car to the general public.”Riding a surge in sales in the three months to June, Toyota bounced back out of the red and reported a respectable profit of ¥190 billion ($A2.4b) for the three months, up from a loss of ¥77.8 billion a year ago.
Sales revenue rocketed 27 per cent to ¥4.87 trillion ($A61.8 billion), thanks mainly to a huge 36 per cent recovery in North American sales.
Another important factor was the absence of bad loans caused by the sudden onset of the global financial crisis and the defaults on loans by owners.
“Due to an increase in vehicle sales and a large decrease in the costs related to loan losses and residual losses in financial services, operating income improved substantially on last year,” said senior managing director Takahiko Ijichi.
Profits were up in all regions for the first quarter, Mr Ijichi said. And here’s more to come.
Toyota directors have again raised their forecasts for the current year, with vehicle sales expected to gain 1.2 per cent for the 12 months to 7.38 million.
Sales are expected to rise everywhere except Europe.
Earnings forecasts for the year have been jacked up a second time from the ¥290 billion posted in 2009-10. The first forecast was for ¥310 billion, but directors now believe Toyota will post a net profit of ¥340 billion ($A4.31b).
Mazda posted a huge 21 per cent rise in vehicle sales to 317,000 units for the three months, and this translated to a 35 per cent rise in revenue to ¥578 billion ($A7.33b).
However, a heavy asset write-down resulted in another first-quarter loss for the company, this time ¥2.1 billion (previously ¥21.5 billion).
Mazda directors summed up the global conditions for most of the producers: “China has remained strong, the economy has shown a recovering trend. The economy in the United States was also on a gradual path toward recovery.
“On the other hand, in the Europe region, uncertainty over the outlook still prevails due to the backlash of car scrapping government incentive schemes in the previous year, the fiscal crises of some European countries and rapid appreciation of the yen against European currencies.”Honda was much more profitable per dollar of sales than Toyota, posting a net profit of ¥272 billion ($A3.45 billion) on sales of ¥2.36 trillion.
The company benefitted from a 28 per cent jump in motorcycle sales (to 2.89 million), mainly thanks to strong demand in Asian markets outside Japan and a 17 per cent rise in car sales (to 899,000) reflecting strong demand in Asia, North America and Japan.
Suzuki, the other maker of both motorcycles and cars, recorded solid gains in all products, with bikes up 16 per cent to 820,000 and cars up 13 per cent to 610,000 units. Marine and power products rose 5.5 per cent, but no volumes were given.
Group revenues were up 14 per cent to ¥656 billion ($A8.33b) while earnings recovered from a near break-ever result to a profit of ¥15.2 billion ($A193 million).
Weak spots were motorcycle sales in North America, down 18 per cent and enough to keep the two-wheeled business in the red, and cars in Europe, where sales were off 11 per cent.
Nissan has also been enjoying a strong recovery in sales, with unit volumes up 32 per cent to 954,000 vehicles in the three months to June. Revenue growth exceeded that with a 35 per cent jump to ¥2.05 trillion ($A26b).
Earnings improved from a loss of ¥16.5 billion to a profit of ¥107 billion ($A1.36 billion).
Subaru (or Fuji Heavy Industries) lifted sales 50 per cent to 150,000 units while revenues rose 36 per cent to ¥370 billion ($A4.7 billion). Earnings improved from a loss of ¥19.3 billion to a profit of ¥1.91 billion ($A242 million).
The big driver was North America, where Subaru sales were up 47 per cent to 67,0000 while Subaru was the odd man out in Europe, lifting sales 88 per cent to 13,000 units while sales in China more than doubled to 17,000 cars.
These strong results from Japanese makers came a week after the big mover in the world industry, Hyundai, reported a strong result for the first half of the year (all the Japanese results were for three months).
Sales were up 27 per cent to 1.76 million units and revenues rose by the same percentage to 18 trillion won ($A16.9 billion).
While revenues were up strongly, earnings more than doubled to 2.52 trillion won ($A2.36 billion) thanks to a range of factors.
Directors said improved demand from mature markets such as the US and Australia was a factor behind the out-sized profit growth. In addition, directors said the results also benefited from a diversification of international markets and new models which took the company into new market areas.
