Toyota's earnings improvement plans for development, procurement and production
Expects consolidated operating income of one-trillion yen in FY2012
2012/06/12
- Summary
- Introducing Toyota New Global Architecture (TNGA)
- Toyota Motor East Japan, Inc. established in July 2012 for centralized production of small cars
- Introducing new production technology to reduce capital investment by 40 percent
- The year 2012 declared to be the year of significant changes to products, including more HV offerings
- Consolidated vehicle sales: Record-high sales of 2.36 million vehicles in January-March 2012
- Targeting a consolidated operating income of 1 trillion yen in FY2012
- Unconsolidated results: Expecting the operating deficits to shrink to 70 billion yen in FY2012, and to breakeven in the near future
Summary
Reported below is a summary of Toyota's earnings structure improvement plans, such as the introduction of the Toyota New Global Architecture (TNGA) aimed at increasing the efficiency of development and parts sharing, and the introduction of simple and also versatile equipment aimed at reducing capital investment. Toyota is determined to recover profitability through continued improvement efforts while keeping the current domestic production of 3 million vehicles a year and innovating production technologies originating in Japan.
Toyota declared that the year 2012 will be a year of significant changes to its products, saying it sees the cycle starting for continuous market launch of "better" cars.
Toyota ended FY2011 with consolidated net revenues of 18,583.7 billion yen, down 2.2 percent, and a consolidated operating income of 355.6 billion yen, down 24.1 percent year-on-year, respectively. According to Toyota, the company is moving ahead with its earnings structure improvement plans but the FY2011 ended with only modest results as the plans were badly affected by two natural disasters and the unexpected appreciation of the yen. Although the exchange rate will remain virtually unchanged for FY2012 from the previous year (exchange rate's influence on the profit is zero), the company expects to end the FY2012 with a consolidated operating income of 1 trillion yen as a result of a sales increase and cost reduction efforts.
In terms of unconsolidated results containing direct impact of exchange losses from exports, Toyota reported a loss of over 400 billion yen consecutively in FY2010 and FY2011. Nevertheless, Toyota expects the loss to shrink to 70 billion yen in FY2012. Toyota hopes to bring the unconsolidated operating loss and income to the breakeven level as quickly as possible.
With regard to overseas operations, Toyota is expediting local production of vehicles and powertrains, especially in North America and Asia (see a related report shown below). On May 25, 2012, Toyota announced company plans to launch eight small cars designed for emerging countries, based on the "Etios" originally launched in India, in more than a hundred countries around the world and sell more than a million units of them a year by 2015.
Related report: Toyota's overseas operations (May 2012)
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