Toyota gets back on the gas

TOYOTA Motor Corporation (TMC) has stepped back on the accelerator – gently – after regrouping to record a whopping ¥2.17 billion ($A20 billion) profit – one of the biggest in Japanese corporate history – in its latest 2014-15 financial year.

The Japanese giant is now preparing to launch the first of a new breed of vehicles on its newly developed Toyota New Global Architecture (TNGA) in the second half of this year, while at the same time resuming the expansion of its production base with new factories in Mexico and China.

Three years ago, the company called a self-imposed breather in its growth strategy as it sought a more sustainable growth path in the wake of its first loss since 1950 in the fallout of the global financial crisis in 2010 and, more recently, the stings and blows of the safety recall scandal.

But after announcing a 19.2 per cent increase in net income in the financial year ending March 31, TMC president Akio Toyoda on Friday said the new financial year would mark a turning point for the company.

“Let me reiterate that we are entering an important phase that will call into question our two main drivers in achieving sustainable growth: building ever-better cars and strengthening our team,” he said.

“We will start launching TNGA vehicles from the second half of this year and by 2020, TNGA vehicles will account for roughly half of our global new car sales.

“Our new competitive production facilities will come online from around 2018 to 2019, and our initiatives to smartly build attractive cars will finally be implemented.”

Mr Toyoda said the new factories would employ innovating production technologies developed during the three-year pause.

“In this way, we intend to create plants instantly renowned for their competitiveness,” he said.

Mr Toyoda said a reorganisation of Toyota’s executive structure meant divisional leaders were closer to the front lines, while more non-Japanese leaders had been appointed to senior positions.

“They will be able to make swift decisions based on ‘genchi genbutsu’, or hands-on knowledge of the situation on the ground,” he said.

“They will also introduce new values and ideas to Toyota. They will be agents of change.”

Despite the profit improvement, Toyota motor vehicle sales fell by 144,169 units to 8.97 million, with stronger sales in North America and Europe offsetting declines elsewhere.

The biggest sales fall was recorded in the Japanese domestic market, where volume slid by 211,000 units, to 2.15 million vehicles.

Asia, including China, was the other blot on the Toyota sales ledger, with sales down 120,000 vehicles, to 1.49 million.

Revenue rose 6.0 per cent, to $A290 billion, thanks to cost-cutting measures and more favourable exchange rates.

The company has forecast a slight drop in sales in the current financial year, due to global market conditions, but with a slight improvement in both revenues and profit.