Toyota Profit Slips

[BMWDave]

Toyota's Profit Slips
The Daily Auto Insider
Wednesday, May 11, 2005


May 2005
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Despite record sales and earnings for its full fiscal year ended March 31, Toyota also reported a 17% profit slump in the final quarter, The Wall Street Journal reported.

Toyota said group fourth-quarter net profit totaled 291 billion yen ($2.75 billion), down 17% from the 351 billion yen it recorded during the same period a year earlier. Sales for that same quarter, meantime, totaled 4.9 trillion yen, an increase of 4.3% from a year earlier.

The WSJ said Toyota was hurt by a difficult global operating environment which includes rising raw material prices, interest rates and gasoline prices.

Toyota, despite the fourth-quarter earnings drop, remains extremely profitable, however, with revenues for the fiscal year through March 31 totaling 18.55 trillion yen, up 7.3% over the previous year. Net profit for the same period rose 0.8% to a record 1.17 trillion yen, the story said. And last month, Toyota again passed Chrysler to become the third best-selling brand in the United States behind General Motors and Ford.

In related news, the Asian Wall Street Journal reported that Toyota is finalizing a plan to build its seventh North American assembly factory in Woodstock, Ontario, Canada, to produce small vehicles such as the Scion brand.

What does this mean?

[Catman]

More economical cars and less trucks are being sold, maybe that's it.  Toyota is selling alot of Priuses, but at a loss from what I understand.

[ifcar]

Many profits have fallen recently, and $2.7 billion is nothing to sneeze at. Toyota's doing just fine, and shouldn't have any major financial woes anytime soon.

[GMPenguin]

Many profits have fallen recently, and $2.7 billion is nothing to sneeze at. Toyota's doing just fine, and shouldn't have any major financial woes anytime soon.

How much does it big corporation such as Toyota have money wise (ball park estimate anyway)?

[Car Zeus]

As of 2004 Toyota had cash reserves over 40 Billion.



Toyota is one of the most profitable companies behind Porsche and Nissan. (in terms of how much revenue they make per vehicle)

[mazda6er]

More economical cars and less trucks are being sold, maybe that's it.  Toyota is selling alot of Priuses, but at a loss from what I understand.

Are you sure about that? I thought the Priuses were being sold for over sticker price to crackpots freaking out over the fuel prices.

[Car Zeus]

Actually this run of Priuses is profitable for Toyota while the prior ones were not.

[CaseyNPham]

I think I read somewhere that only Microsoft has a larger cash/money reserve than Toyota. I could be wrong, but Toyota has been selling so many cars lately, I don't think they're gonna start worrying yet.

[Laconian]

rising raw material prices, interest rates and gasoline prices

These are factors that affect all manufacturers the world over.

At least Toyota isn't being hit by multiple failed product launches.

[Lebowski]

As of 2004 Toyota had cash reserves over 40 Billion.



Toyota is one of the most profitable companies behind Porsche and Nissan. (in terms of how much revenue they make per vehicle)

Revenue per unit is price.  A company like Mercedes (standalone, not DCX) or BMW will always have a higher RPU than a toyota regardless of which is more profitable.  And, a company w/ a high RPU can be not very profitable and vice versa, although obviously high RPU helps.

[BMWDave]

As of 2004 Toyota had cash reserves over 40 Billion.



Toyota is one of the most profitable companies behind Porsche and Nissan. (in terms of how much revenue they make per vehicle)

Revenue per unit is price.  A company like Mercedes (standalone, not DCX) or BMW will always have a higher RPU than a toyota regardless of which is more profitable.  And, a company w/ a high RPU can be not very profitable and vice versa, although obviously high RPU helps.

It all depends on profit...Porsche is more profitable than Toyota, yet they obviously dont sell more cars.

[Lebowski]

As of 2004 Toyota had cash reserves over 40 Billion.



Toyota is one of the most profitable companies behind Porsche and Nissan. (in terms of how much revenue they make per vehicle)

Revenue per unit is price.  A company like Mercedes (standalone, not DCX) or BMW will always have a higher RPU than a toyota regardless of which is more profitable.  And, a company w/ a high RPU can be not very profitable and vice versa, although obviously high RPU helps.

It all depends on profit...Porsche is more profitable than Toyota, yet they obviously dont sell more cars.

Yeah I know, but he said profitability is defined as how much revenue they make per vehicle.  Revenue per vehicle is essentially nothing more than the average price per vehicle (although it's the price the manufacturer, not the dealership, realizes).  It doesn't necessarily indicate profitability, although again obviously high prices help.