Toyota is the world’s biggest automaker in terms of global sales; nevertheless, they are suffering losses along with other big auto companies this year. The quarterly reports for Toyota are one instance in which smaller numbers were a good thing: only an $819 million quarterly loss instead of the much larger numbers projected.
Initially, Toyota was expecting losses totaling 550 billion yen for the 2009 fiscal year, which ends in March of 2010. Now they are expecting the number to be closer to 450 billion yen, or $4.7 billion.
Toyota Prius sales have been booming. The hybrid’s sales are largely responsible for the better numbers Toyota was able to report this quarter, which spans April to June. Japan’s government incentives and cost cutting strategies have given the company a substantial boost.
The Japanese carmaker beat General Motors Corp. in 2008 for the lead in worldwide sales. In Japan, the Prius gas/electric hybrid has been the number one seller for two months, and this trend is expected to continue.
Prius orders total 245,000 in Japan since May. The government has made hybrid buying a tax-free process for Japanese consumers; along with their clunker exchange program, this strategy has significantly raised sales numbers for all eco-friendly vehicles.
Honda and other Japanese auto companies have also fared better than was forecast. Honda, considered the #2 automaker, has managed to remain in the black despite the expectation of a loss.
Before the worldwide financial meltdown, Toyota was forging ahead with massive expansion plans. Toyota’s reputation for high quality vehicles, resale value and high fuel efficiency made the auto giant second to none. However, last fiscal year’s loss of about 436 billion yen was their worst loss in 70 years.
The 2008 loss came in the latter part of last fiscal year after reporting over a 353 billion yen profit for the quarter spanning April to June.
In order to rise above the global recession, Toyota trimmed expenses, including jobs, managers’ salaries, production, travel and investments.
Senior Managing Director Takahiko Ijichi said that during that time, “Although we were able to make certain improvements in fixed cost and cost reduction efforts, the decline in vehicle sales and the appreciation of the Japanese yen had a severe impact on our earnings.”
For this April-June quarter, Toyota’s loss was 140 billion yen. Honda reported a profit of 7.5 billion yen, and Nissan had a 16.5 billion yen loss (less than predicted).
The overall numbers and talk of a letup in the global recession have automakers feeling guardedly optimistic about the remainder of this fiscal year.