JAPAN: Marketing and cost cuts pay off for Toyota
Toyota Motor boosted operating income in the first quarter from a loss of JPY194.9bn a year ago to JPY211.6bn yen. Net income increased from a loss of JPY77.8bn to JPY190.4bn.
Major factors contributing to the operating increase include the effects of marketing efforts of JPY400bn and cost reduction efforts of JPY50bn, Toyota said.
Net revenues for the first quarter rose 27% to JPY4.9bn. Consolidated vehicle sales for the first quarter totaled 1.82bn units, up 419,000 year on year.
Senior managing director Takahiko Ijichi said, "Due to an increase in vehicle sales and a large decrease in the costs related to loan losses and residual losses in financial services, operating income improved substantially on last year."
Operating income improved year on year in all regions for the first quarter. In Japan, operating loss improved by JPY184.5bn to JPY27.5bn.
In North America, operating income increased by JPY113.4bn to JPY109.7bn including JPY700m of valuation gains/losses from interest rate swaps. Operating income, excluding the impact of valuation gains/losses from interest rate swaps, increased by JPY125.1bn to JPY109.0bn.
In Europe, operating loss improved by JPY13.6bn to negative JPY6.8bn. Operating income in Asia increased by JPY63.3bn to JPY90.2bn. In Central and South America, Oceania and Africa, operating income increased by JPY23.6bn to JPY41.0bn.
In the financial services segment, operating income increased by JPY65.5bn to JPY115.1bn fiscal year on year, including JPY5.6bn of valuation gains/losses from interest rate swaps. The increase was in part due to higher than expected prices of second hand vehicles and a large reduction in costs related to loan losses and residual losses as provisions were reversed in the United States. A strengthened vehicle marketing programme also increased the lending balance.
TMC revised its consolidated vehicle sales for the full fiscal year ending 31 March, 2011 from 7.29m to 7.38m units.
TMC also revised its consolidated financial forecasts to consolidated net revenues of JPY19.5 trillion, operating income of JPY330bn, income before income taxes and equity in earnings of affiliated companies of JPY380bn and net income of JPY340bn.
Ijichi said: "We note a lack of visibility concerning currency movements and the possible backlash in demand after the end of the demand-stimulus programmes in Japan, which requires our close monitoring. Nevertheless, we will do our utmost to reach as many customers with as many vehicles as possible. We will continue our activities for fixed and variable cost reduction as previously promoted under the emergency profit improvement activities. Through the activities, and the further improvement of our earning structure, we will maximise our effort to exceed our forecasts."