Filed under: Toyota, Earnings/Financials
Toyota makes money in its Q2, but Tundra incentives take their toll
Whenever we talk about GM's performance in the global market, people invariably want to hear about how well Toyota is doing in the same arena. The Japanese automaker has been nipping at the General's heels in terms of the number of units each automaker has sold globally so far this year. Earlier in the year, Toyota actually surpassed GM in global sales, but the American auto giant has since regained the lead in year-to-date global sales and keeps it through Q3. On a global scale, Toyota performed quite well in its own fiscal second quarter, which is the same period as the calendar year third quarter for most companies. During this period, Toyota earned its second highest ever operating profit of $5.01 billion, but its North American figures were hurt by a few factors, chief among them being incentives required to increase sales of its Tundra full-size pickup. Higher raw material costs and, of course, the subprime market meltdown are also contributing factors.
Regardless, Toyota isn't budging on how many vehicles it expects to sell worldwide during its fiscal year that ends March 31, 2008. In fact, it's raised its target to 8.93 million units, up some 40,000 units from previous estimates. Seems that despite recent bumps in the road concerning quality concerns over the car and trucks it sells in the U.S., Toyota's juggernaut keeps on steaming ahead.
[Source: Automotive News, sub. req'd]
Reader Comments (Page 1 of 2)
J 1:53PM (11/07/2007)
Being an American what can you say except I wish them the worst.
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Tony 2:03PM (11/07/2007)
As an American, it bothers me that someone will use being American as a reason for being a Xenophobe.
Please America is too honorable and decent to used as a shield for Xenophobic remarks...That is just not acceptable.
jonathan 2:08PM (11/07/2007)
Being an American means understanding that the country is quite different from what it was 50 years ago. Companies like toyota are here to stay and they are contributing to the American Economy.
People in China are not wishing GM the worst. Infact they are buying more Buicks than Americans.
You should try to appreciate that!
josh 3:13PM (11/07/2007)
As an American I find your comment to be extremely unpatriotic. If you don't like your fellow Americans (the mechanic who changes the oil on a Camry, the truck driver who delivers the parts to dealers, the assembly line workers who put tightens the lug nuts, etc. etc.) who work hard to support their families and support our economy and community ....well then you can get out you traitor.
David Clark 3:29PM (11/07/2007)
@Jonathan: Find me a chinese man in a Buick (in China, mind you.) Nice try.
Lithous 2:00PM (11/08/2007)
"As an American I find your comment to be extremely unpatriotic. If you don't like your fellow Americans (the mechanic who changes the oil on a Camry, the truck driver who delivers the parts to dealers, the assembly line workers who put tightens the lug nuts, etc. etc.) who work hard to support their families and support our economy and community ....well then you can get out you traitor."
LMAO, so if you don't like ambulance chancing lawyers and say so then you are unpatriotic? If you are a priest and don't support or agree with adult movie stars then you are unpatriotic.
I got the logic. REAL GOOD as it may seem to you that is basically propaganda on your part to suggest that against Toyota is unpatriotic.
The terrorist create jobs too (in military, homeland security, law enforcement, etc.) is it unpatriotic to say anything against them too?
spw 1:55PM (11/07/2007)
So wait, Toyota makes $5 billion in single quarter... GM loses 40 billion... Toyota news reads as bad, GM news reads as good...
good job!
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josh 3:18PM (11/07/2007)
They're written by John Neff. Bona fide leader of the GM apologist crowd. What else can you expect?
That One Person 5:28AM (11/08/2007)
Read up on that whole "GM losing $40bil". If you knew anything about it, GM didn't lose the money. It had something to do with taxes. GM is fine.
Dan 1:55PM (11/07/2007)
"Tundra incentives take their toll"
What toll? $5.01 billion dollars in operating profit? seriously, what toll?
were you expecting $100 billion Operating profit? Geez!!
$38 billion write down? Yikes thats a toll.
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tekdemon 3:46AM (11/09/2007)
I know, these jokers are here claiming that GM's loss wasn't a real loss.
Well, while they didn't just actually burn $40 billion in dollar bills, the truth is that they won't be able to save $38 billion in taxes.
I don't know what kinda idiots don't think not being able to save $38 billion in taxes isn't a big deal. Essentially, the entirety of their tax credits due to losses from previous years has been wiped out as being too unrealistic to use.
On top of which, they really DID lose regular old money, since the tax write-off asset loss was only 38 billion but they lost almost 40 billion. In fact, they lost an ADDITIONAL 1.6 billion dollars.
This is coming from a (thankfully) former GM stockholder. I have nothing against GM, but only a completely delusional idiot would think that it's not a big deal that GM lost $40 billion.
HineyWipe 2:07PM (11/07/2007)
In other words, market projections for Tundra sales were WAY off their expectations. And will be again until after the assembly problems (dash, transmission, tailgate, ...) are corrected (likely 2008 2nd qtr). Still Toyota had a profit, but GM has a bigger write-off (and in more politicians pockets than Toyota).
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ricky 2:45PM (11/07/2007)
yeah nice job scapegoating the tundra and the american market in general. it has made them rich and they can chastise it still.
what do you expect though. I can't wait for the tides to turn in a couple years. Hopfully the dollar softness kicks them in the ass next year on their recort exporting from japan.
looks great on them.
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J 3:20PM (11/07/2007)
Tony thats funny, xenophobic, hardly, my employer for the last 20 years isn't American who by the way can tell you a great deal about foreign lands and the companies that operate there, get your head out of the dictionary and realize Toyota has a tilted playing field, in there favor, from American car companies, I mean why does Japan protect its markets to American companies....
Jonathan I don't know why you brought up China, but anyway yes the economy is very diverse from 50 years ago, I can't verify because I wasn't here, but I don't appreciate a company that has raped this country by unfair trade practices at the expense of American jobs, these vehicles are only put together here, all the money still returns to Japan....
Josh, you are the crap that people step in, unpatriotic?, your just stupid, Toyota isn't an AMERICAN COMPANY, I mean you think GM or Ford workers don't support the economy and community?
Besides have you ever heard of a Classic Toyota?
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Takeo 5:07PM (11/07/2007)
Uhh yeah J actually I have, a Toyota Crown is a good example of a classic car, but the nameplate's actually still around in Japan, there's also the Yotohachi sports coupe, and you could even make the argument that the AE86 is a "classic" car.
Just because it ain't a muscle car or doesn't have fins doesn't mean it can't be classic, nor does it have to be a car that YOU personally have heard of.. "J".
MKIV 4:43PM (11/07/2007)
@J
PS. Do you read much?
D 4:10PM (11/07/2007)
J
Toyota 2000GT
classic
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Mike 6:09PM (11/07/2007)
You people still don't get the math.
Toyota (and Honda, Hyundai, etc. together) has brought many fewer jobs than have been lost by any single one of the American companies (let alone their suppliers and dealership employees). That means less American workers to support our local economies, that also means less research and developement being done by American engineers and scientists.
Toyota's success is costly to the American economy. Sorry if that offends you but it's a fact.
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bcknkd 9:03AM (11/08/2007)
And how many jobs lost because your own manufacturers ship production north and south of your borders and into Eastern Europe and China because?
Mike 10:02AM (11/08/2007)
When you are getting severely beaten by the competition for labor rate, you will be forced to outsource jobs to countries with lower standards of living or other economically beneficial status (such as socialized health care in Canada). It's the only way to compete and survive when the product mix goes towards low profit vehicles like B and C cars.
This still doesn't change the fact that if Toyota wasn't as successfull, there would be as much need to outsource jobs to get back some of the massive labor cost discrepancy.