Toyota posts record profit

TOYOTA Australia has announced a record net after-tax profit of $242.2 million for its 2007/08 financial year ending on March 31 – up $57.8 million on the $184.4 million profit it posted in 2006/07.

The news was announced in a July 21 press release titled “Challenging times continue for Australian car makers”, which failed to mention the figure was a record return on investment for Toyota’s Australian subsidiary.

Toyota Australia’s corporate manager of external affairs Peter Griffin said the company was “loathe to use those sorts of terms because of the pressure that’s on our manufacturing operation”.

Instead, it quoted president Max Yasuda as saying Australian car-makers cannot expect relief in the current financial year from increasing global competition, exchange rates and shifting customer demands.

Left: Toyota Australia president Max Yasuda.

“The short-term viability of car manufacturing is under considerable pressure in Australia, as it is in many parts of the world as a result of rising fuel costs, changes in customer preferences and currency issues,” he said.

“In our market, I expect the local car-makers will continue to see increased pressure on profitability from manufacturing operations, in spite of strong revenues from imported vehicles.”

The record Toyota profit coincided with an all-time Australian automotive industry record of 1,049,982 new-vehicle sales in 2007, a year in which Ford Australia posted an $87.2 million operating loss.

GM Holden is yet to announce its 2007 calendar/financial year results, which are expected to be healthier than the $146 million loss it recorded in 2006, due mainly as a result of its $1 billion investment in the VE Commodore.

Toyota sold a record 236,647 vehicles in Australia in 2007, representing a market share of 22.5 per cent. Including Lexus, Toyota Australia’s domestic sales total was even greater for its April 2007-March 2008 financial year, at 248,647.

Sales revenue for the same period was $9.4 billion, compared with $8.3 billion the previous year, while export sales increased from $1.5 billion to $1.8 billion with a financial year volume of 99,395 - up from 81,326 in 2006/07. Toyota Australia’s capital expenditure last fiscal year was $99.8 million.

Mr Yasuda said the outcome of the federal government's automotive industry review would be extremely important to the future of the Australian industry, and again stressed the negative financial affects of increased raw materials costs and a buoyant Australian dollar.

“The headline number reflects a positive year and our sales and marketing teams have performed strongly in the domestic market, with five of the eight top-selling vehicles for the period being Toyotas,” he said.

“However, Australia's resources boom and increasing interest rates have strengthened the Australian currency, which increased by 13 per cent during the period. In addition to diluting our export competitiveness, the increased demand for resources raised the cost of raw materials and components for the car makers and components suppliers.

“We see this as an ongoing challenge for our operations in Australia.

“Since 2002 we have invested about $900 million on investments aimed at cost and efficiency improvements. In addition, we have invested in improving employee skills and initiated a company-wide program aimed at improving efficiency and reducing costs across all parts of the business,” said Mr Yasuda.