One of the last things Shoichiro Toyoda did as honorary chairman at Toyota Motor Corp., was to assemble all of the company's executives and give them a tongue lashing. Toyoda even called out president Katsuaki Watanabe and blamed those in charge of the Japanese automaker for leaving behind the company's long-standing business practices to chase the quick-buck. He said they followed the lead of now-bankrupt automakers like GM and Chrysler, a path that has put the company in a serious financial bind.
While Toyota has posted significant profits for years, last year it posted a $4.5 billion loss and expects to lose even more ($5.7 billion) next year.
Toyota has always been known for building economical cars and for using a business practice called kaizen, where small improvements are constantly made to improve products. It is expected that Akio Toyoda (pictured above), the new Toyota president and grandson to the company’s founder, will once again begin to return the company to an economically-minded, slow growth corporation. Akio will officially take over the Toyota helm tomorrow.
Industry experts also believe that in order for Toyota to stay on top it must not only move away from luxury cars and large trucks, but it must also look outside the United States and develop vehicles for emerging markets.
A day after GM posted yet another staggering quarterly loss, Toyota has released that it expects to loose $8.6 billion during this fiscal year. The loss was mostly driven by Toyota's Q4 results, which just came in at negative $6.9 billion.
This is the first annual operating loss Toyota has ever posted and even more shocking it comes just one year after record profits.
Toyota President Katsuaki Watanabe noted the worldwide economic downturn at a new conference but was clear that the blame doesn't entirely lie outside the company. "Of course the external environment doesn't help, but we were lacking in the scope and speed of dealing with various problems and issues, and for that I am sorry."
Toyota expects that for it's 2009-10 fiscal year sales will decrease by 14 percent to 6.5 million vehicle worldwide.
To return to profit Toyota must sell more vehicles, increase profits and/or reduce operating costs. Watanabe predicts that the total annual vehicle sales for 2009 in the U.S. will be 10 million vehicles, but even that may be optimistic.
Vehicle sales may, however, go up with the introduction of the new Prius this year. The only problem is, Toyota already significantly cut the MSRP of that vehicle to compete with Honda's Insight - resulting in lower profit margins.
To reduce expenditures, Toyota is slowing production significantly with one third of its plants working single shifts. The automaker has also ceased any expansion plans for the year. Toyota has no plans of closing any production facilities.
Meanwhile rival Honda Motor Co. is forecasting a small profit for the year, due mostly to it's motorcycle business.
On the day that The General announces involuntary gastric bypass surgery at the hands of Dr. O and while Crash Cart Chrysler waltzes with the Grim Reaper, not all is well with Toyota. The nosy newsmen at Boston’s ABC affiliate exposed a nasty little secret hiding under Toyota’s hospital gown. Yesterday Team 5 divulged “more than two dozen complaints filed with the National Highway Traffic Administration” regarding 2001 and 2002 model year Tundra frames that are rusting and blowing away. Today Toyota implied responsibility when they offered to buy back the rust buckets at full retail value. Keep in mind that this issue is limited to certain areas of the USA and Canada where salt is used as the predominant ice melting material.
Toyota Tundra Forum
