Toyota: Record high operating income of JPY 2.7 trillion expected for FY 2015

Continuation of profit improvement activities for sustainable growth



The all-new high-end minivan, Alphard, launched in Japan in January 2015, features "see-through view" and other new parking assist systems (photo: courtesy of Toyota)

 Toyota Group (Toyota) is likely to set new records in their consolidated financial results for the fiscal year ending March 31, 2015 (FY 2015), with consolidated net revenues of JPY 27 trillion and operating income of JPY 2.7 trillion (operating profit ratio of 10%). Its net revenues and profit were boosted by a series of structural reforms that included cost improvement and low-cost production efforts after the global financial crisis, and the unexpected depreciation of the Japanese currency.

 Toyota revised down its consolidated vehicle sales forecast for FY 2015 by 1.3% from 9.12 million units sold in FY 2014 to 9.0 million units. The company's global sales plan for the calendar year 2015 was reduced by 1% to 10.15 million units while global production for the same period was reduced by 1% to 10.21 million units. Toyota is doing well in North America but its sales have been slow in Japan and emerging markets including Asia that was leading the company's growth over the past few years.

 At the start of FY 2015, Toyota referred to its financial results for the year to be in "an intended temporary lull" as it would be the year of internal repletion toward "sustainable growth" through aggressive investment in developing next-generation vehicles. Although a record-high profit is expected, Toyota's basic policy to further strengthen profit improvement activities for mid- and long-term growth remains unchanged. In 2014, Toyota developed a series of new world-leading technologies. The company enhanced internal combustion engines and increased availability of active safety technologies, and launched the Mirai, the world's first mass-market fuel cell vehicle (FCV). In November through December 2014, Toyota and its major suppliers announced consolidation plans for their brake, manual transmission and other businesses to prepare for the Toyota New Global Architecture (TNGA) platform.

 Toyota is launching the all-new Prius and Innovative International Multi-purpose Vehicles (IMVs) in 2015. These models will be major contributors in sales in 2016 and are likely to boost at least Toyota and Lexus brands' vehicle sales. In 2017, Toyota is rolling out new models built on the TNGA platform that will substantially increase its competitiveness. With all these plans, the year 2016 will mark the start of a new period of expansion for Toyota.

Related Reports:
Toyota: Introduction of active safety packages on all cars in three years (Feb. 2015)
Toyota in U.S. and Europe: Reinforcing Lexus and high-performance lines (Oct. 2014)
Toyota: Implementing strategy to launch fourteen new engines in two years (Sep. 2014)