All Entries Tagged With: "toyota profit"
Toyota’s Operating Profit Falters on Yen Exchange, Car Strategy – Time Invest in Toyota Tundra?
Toyota announced its operating profit fell 15 percent in the latest quarter and they are lowering their annual forecast to a four-year low. Executives blame the profit loss on a strong Yen affecting exchange rates and the changing appetites of U.S. consumers who simply aren’t buying staple models – Camry, Corolla and Prius – like they used to according to an Autonews.com story. Toyota says they will respond by cutting payroll and looking for additional savings. While that is a short-term fix, the long-term solution, I think, should be reacting to the market trends and investing more resources into the Tundra.
The Toyota Prius is a perfect example of the changing face of the U.S. consumers buying habits in that it isn’t selling that well compared to Japan where it is a perennial top seller.
Putting Toyota’s Big Loss In Perspective
If you’ve been paying attention to automotive news in the last week, you’ve undoubtedly heard that Toyota lost an obscene amount of money in the first quarter – $7.7 billion to be exact. Toyota was quick to point out that this loss is against a $3.3 billion profit in the previous three quarters, resulting in a $4.4 billion loss for the 2008 financial year. (NOTE: Toyota’s financial year ends after the first quarter.) Worst still, Toyota anticipates losing about $5.5 billion for the coming year.
Toyota’s Loss is Big, But Don’t Let Anyone Fool You
photo credit: Andres Rueda
In other words, Toyota lost a lot of money last year and they’re planning on losing a lot of money this year too. Considering the fact that Toyota hasn’t had an operating loss since 1950, this is a big deal. Toyota has taken sweeping action with tremendous production cuts, cost cutting measures, and most recently announcing that they’re going to fire half of their corporate management team.
However, before anyone starts worrying about “Toyota being the next GM,” here’s some perspective:
