How Bad is U.S. Auto Market? Toyota’s Losing Money, Too
Toyota had an operating loss of 34.6 billion yen in the first half of its 2009 fiscal year, the period ending Sept. 30, versus an operating profit of 263 billion yen. Depending on the exchange rate, that’s an operating loss for the half of about $358 million.
That’s a lot better than the billions lost by the Detroit automakers, but it’s sufficiently dire by Toyota standards to warrant the creation of an “Emergency Profit Improvement Committee,” charged with a mandate to salvage a profit for the 2009 and 2010 fiscal years.
Specifically, the committee will review production capabilities, as well as the scale and timing of new projects, the company said in a Nov. 6 presentation.
Reading between the lines, Toyota until now has been so successful for so long, especially in the United States, it may have lost focus on its penny-pinching tradition.
Meanwhile, Toyota’s U.S. sales fell 32.3 percent in September from the year-ago month.
The drop prompted the company to offer unprecedented zero-percent financing deals. Despite the offers and a big advertising blitz, U.S. sales fell almost as much in October, down 23 percent from the year-ago month, according to AutoData Corp.
Toyota’s announcement seems to acknowledge the company may be trying to do too many things at once, like succeed in the fullsize pickup truck segment with the Toyota Tundra; the minicar segment with the Scion brand; the luxury car segment with the Lexus brand; and potentially create yet another entire lineup based around the popular Prius hybrid model.
Toyota certainly has enough product to go any way the market goes. On the cover sheet of its financial results, the company featured a picture of the tiny Toyota iQ model, which allegedly seats four, although based on its outside appearance, it’s hard to see how. The iQ goes on sale initially in Japan this month and in Europe in early 2009. No official word yet on the potential for North American sales.