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Toyota expects stellar results in its fiscal-year earnings announcement on May 8. But there could still be some wobbles in the final report. TOKYO — CEO Koji Sato has wrapped up his first year at the helm of Toyota Motor Corp., driving the world's biggest automaker to record sales and record output and, most likely, record profit. But Sato is also riding high on the momentum of his predecessor and mentor, Akio Toyoda. The scion of the founding family stepped down last year after leading Toyota for more than a decade and building a veritable Japanese juggernaut that looks stronger than ever. Sato, who took over from Toyoda on April 1, 2023, delivers the official fiscal-year financial results of his first term at a May 8 news conference in Tokyo. By all measures, Sato will likely be announcing stellar figures. Aside from already booking record sales and production volume in the fiscal year ended March 31, Toyota expects to achieve record operating profit. In fact, Toyota expects both operating profit and net income to nearly double compared with the previous year. But there still could be some wobbles in the final report, including guidance on the current fiscal year and whether red-hot Toyota can keep up its relentless pace. "You're not going to have growth like this this year, because last year was extraordinary," says Christopher Richter, lead Asia auto analyst at CLSA in Tokyo. "You had the end of the chip shortage, the end of COVID, the world got back to normal. The auto industry isn't a fast enough growth industry to support those kind of numbers for very long." Indeed, Toyota faces five risks to its ongoing profit performance. 1. Group scandals  The Toyota Group has been beset by embarrassing quality scandals that forced production shutdowns and sales suspensions, while tarnishing the company's reputation. Toyota truckmaking unit Hino Motors was tripped up in 2022 after fudging emission certifications in an uproar still looming over the company. Hino has been earmarked to merge with Mitsubishi Fuso, the Japanese truck manufacturer owned by Daimler. In December, Toyota's minicar subsidiary, Daihatsu, suspended global shipments after it was found to have rigged side-collision safety tests. Daihatsu had to stop shipments of all models. Then in January, Toyota halted worldwide shipments of 10 nameplates because engines supplied by Toyota Industries Corp. had undergone improper horsepower and torque testing. The reduced output and sales have dented the rosy results Toyota originally expected. Group supplier Denso Corp. reported an 11 percent retreat in fiscal year operating profit, partly on quality provisions. Watch for more knock-on effects in Toyota's final report. 2. Rampant growth 3. Weak yen 4. China challenge 5. EV vs. hybrid

🚗 The Impact of Pricing Models on Profit Margins 🚗 In the competitive automotive industry, pricing strategies can make or break profitability. My recent analysis of two major Japanese automakers, Nissan and Toyota, reveals a telling contrast. While Nissan’s average discount is a staggering seven times higher than Toyota’s, this aggressive pricing hasn’t translated into financial success. In fact, Nissan has faced three consecutive years of EBITDA margin erosion. On the other hand, Toyota’s more measured approach, with better allocation strategies, appears to support a more effective pricing model. The correlation between EBITDA margin and average incentives underscores the importance of strategic pricing in maintaining profitability. What do you think—can aggressive discounts ever lead to long-term success? Let’s discuss! #AutomotiveIndustry #PricingStrategy #Profitability #MarketTrends

Manufacturer Spotlight - Toyota   Toyota's net profit doubled in the fiscal year ending March, surpassing its own projection. Sales rose by 21%, with global sales reaching 9.4 million vehicles. The company highlighted strong hybrid sales and its commitment to various electric vehicle types. Toyota expects to sell 9.5 million vehicles in the current fiscal year and plans investments in technology and human capital. CEO Koji Sato emphasized the need for Toyota to embrace challenges to solidify its position as a mobility company amidst industry transformations. Despite challenges like the chip shortage, Toyota has rebounded from production disruptions. Embrace the future with Toyota and ensure your success by teaming up with us. Join our network of valued Toyota partners who excel amidst industry changes. Reach out to us today to begin a collaborative partnership. https://lnkd.in/gfX_wNSc

As Toyota Motor Corporation gears up for its fiscal-year earnings announcement, CEO koji Sato faces significant challenges despite expecting record profits. 𝗚𝗿𝗼𝘂𝗽 𝗦𝗰𝗮𝗻𝗱𝗮𝗹𝘀: Recent quality scandals have tarnished Toyota's reputation, leading to production halts and sales suspensions across various subsidiaries. 𝗥𝗮𝗺𝗽𝗮𝗻𝘁 𝗚𝗿𝗼𝘄𝘁𝗵: The company's rapid expansion has overstretched its resources, prompting a strategic slowdown to reassess and ensure sustainable growth. 𝗪𝗲𝗮𝗸 𝗬𝗲𝗻: While beneficial last fiscal year, the fluctuating yen poses a risk to future profits as global economic conditions shift. 𝗖𝗵𝗶𝗻𝗮 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲: Despite efforts to boost sales with new EV models, Toyota continues to struggle in the competitive Chinese market. 𝗘𝗩 𝘃𝘀. 𝗛𝘆𝗯𝗿𝗶𝗱: Toyota's cautious approach to fully electric vehicles contrasts with its success in hybrids, posing long-term strategic questions. The company's focus on digital transformation, customer-centric approaches, and collaborative ventures in emerging markets further illustrates its comprehensive strategy to adapt and thrive amidst challenges https://lnkd.in/dex55fQH Toyota's plan to navigate these challenges is rooted in a balanced approach that prioritises quality, sustainability, technological innovation, and strategic market adaptation. #toyota #automotiveindustry #businessstrategy #electricvehicles #corporategovernance #financialforecasting

Auto update.. - grim global financial news... Volkswagen Group cut its profit forecast, it may be forced to shut down six factories in Germany due to high costs. Manufacturing plants in Europe were working at lower capacity – dropping to 54% in 2023 from 65%, for those higher-cost countries, such as Germany, while those in central and eastern Europe dropped from 83% of utilisation to 79%. Production output from Toyota, fell by 11% in August 2024 – marking the seventh straight month of decline. Nissan revealed its operating profit had collapsed by 99% – with just $AU10.1 million Stellantis – the parent company of 15 car brands including Alfa Romeo, Citroen, Fiat, Jeep, Maserati, Peugeot, and Ram – announced net profit for the first half of the year had almost halved to $AU9 billion after sales fell by 14%. By September, new-car sales in China had dropped by 5.5% – marking the sixth straight month of decline – with production also dropping by 3.2%. Buckle up kids.....

The significant profit decline among major automakers is as follows: Volkswagen (VW): • In Q3 2024, Volkswagen reported a 42% decrease in operating profit, attributing the decline to weak performance in its core passenger car unit and high costs, including those for model revamps. Audi: • For the first nine months of 2024, Audi’s profit after tax fell by 45.8% to €2.42 billion, down from €4.47 billion during the same period in 2023. BMW: • According to Q3 2024 financial data, BMW experienced a sharp decline in net margin to near 0%, despite stable revenue. • The company’s profitability eroded significantly, with rising cost of goods sold (COGS) and higher expenses leaving little net income. This follows a broader trend of declining margins, as seen in annual performance, where net margins plummeted from 13% in 2022 to significantly lower levels in 2023. competition and market pressures. Mercedes-Benz: • In Q2 2024, Mercedes-Benz reported a net profit of €3.1 billion, down from €3.6 billion in the same quarter of 2023, indicating a 13.9% decrease. Here’s what we can conclude: 1. Legacy Automakers Are Struggling to Adapt. European giants like VW and Audi are losing profits as they face intense competition from Chinese EV makers and mounting transition costs. 2. Profit Decline Signals Industry Turmoil. Declining margins reflect a seismic shift in the global auto market, challenging traditional leaders to innovate or risk irrelevance. 3. European Auto Hegemony at Risk. The weakening profits of BMW and Mercedes-Benz threaten the economic backbone of Europe, underscoring an urgent need for transformation. www.elzarshariah.com www.mycourse.my

Toyota is making a reputation move that will ripple into 2025, possibly 2026. Sales are up 14.7% YoY, outpacing every other automaker. Impressive, but that’s just surface-level. It’s not only selling more cars; it's creating more public advocates at a volume unmatched by any other brand in 2024. The Widewail Automotive Reputation Index is newly updated with fresh data, and it tells us one thing: Toyota is winning. It’s the review volume leader in 2024 with a median of 27.7 Google reviews per dealer, per month. That’s 46% growth over 2023. We see some shuffling in the review volume leaders: Toyota: 27.7 (46% YoY growth) Honda: 24.1 (59% YoY growth) Lexus: 23.0 (22% YoY growth) BMW: 21.8 (21% YoY growth) Toyota is translating sales into brand advocates with impressive efficiency. How we think about the process: More sales > more review opportunities > more public advocates > more social proof > higher search rankings > more inbound traffic > more sales. And the flywheel spins. Yesterday, we launched the latest iteration of the Index: Q1 and Q2 2024 data with newly added columns for QoQ and YoY data points so that you can identify the movers. Monthly updates to the Index begin in September. Find your dealership in the Index (free): https://lnkd.in/gmtwpJS3 Toyota North America

Volkswagen Faces Profit Warning and Potential Audi Plant Closure Volkswagen's shares plummeted after the company issued a profit warning and hinted at the potential closure of an Audi plant in Brussels. The automaker revised its operating return on sales forecast down to 6.5% to 7%, from the previous 7% to 7.5%, as demand for the Audi Q8 e-tron, an electric vehicle, plummeted. European automakers, including Volkswagen, suffer from declining electric vehicle sales, worsened by competition from state-subsidized Chinese rivals. The potential shutdown of the Brussels plant, which employs 3,000 people, could be Volkswagen's first factory closure in nearly four decades. The company estimates that the closure or repurposing of the site could cost up to 2.6 billion euros ($2.81 billion) in operating profit for the 2024 fiscal year. Deutsche Bank analysts see the potential shutdown as a positive move in the long term. Audi, a division of Volkswagen, has been identified as a major concern for investors due to delays in new model launches and an aging portfolio. The average age of Audi's models is now six years, compared to three years for BMW and 3.6 years for Mercedes. Volkswagen's overall deliveries have also slumped, with a 3.8% decline globally in the second quarter, and a steeper 11.3% drop for Audi. Deliveries to China fell by 19.3% in the same period, while there were slight increases in Western Europe and North America. # Thank you Elena Martinez for your submission!

With Nissan Motor Corporation's financial health deteriorating, the Japanese automaker is jettisoning jobs and slowing assembly lines. The scent of opportunity has activist investors and potential buyers circling — fueling industry chatter about Nissan’s prospects as an independent automaker. That drumbeat of speculation has gotten loud enough that Nissan Americas’ head honcho dispatched a Thanksgiving weekend memo intended to calm U.S. retailers’ frayed nerves. “We are working diligently to implement turnaround actions and the stability and future value they will bring to valued business partners like you is a high priority for us,” Nissan Americas Chairperson Jeremie Papin said in the Nov. 30 message viewed by Automotive News. In the short- and midterm, Papin said Nissan will focus on three areas: reinforcing the product lineup, stabilizing and right-sizing the business, and driving growth. A retailer said the network is significantly concerned about Nissan’s long-term business outlook. Papin’s comments “took away some of the heartburn, but we need details on the path to a sustainable future,” said the dealer, who asked not to be identified. Another dealer was unimpressed, saying the memo “did nothing to address the speculation and apparent financial difficulties Nissan is facing.” About two years since the height of the vehicle shortages brought on by the pandemic, Nissan has had to significantly reduce production capacity and business operations because of poor sales performance. ”This shows to me a complete lack of vision and understanding of the marketplace at a time when they were highly profitable and selling every vehicle they were building,” the second retailer said.

Here are the top five takeaways from Sato’s blockbuster earnings announcement on May 8. TOKYO – CEO Koji Sato wrapped his first year at the helm of Toyota Motor Corp. by shattering the company’s earnings records – notching new highs in profits, sales and output. Here are the top five takeaways from Sato’s blockbuster earnings announcement on May 8. Re-investment Toyota is plowing its bumper profits back into long-term sustainability.  The automaker will spend about 380 billion yen ($2.51 billion) on improving human capital throughout its supply chain this fiscal year. That includes efforts to support wage increases and better working conditions at suppliers and dealers, and within its own offices and factories. Tempered outlook The ramped-up investment will partly eat into earnings. Toyota forecast operating profit to decline some 20 percent to 4.3 trillion yen ($28.42 billion) this fiscal year from the record 5.35 trillion yen ($35.36 billion) posted in the year ended March 31. Net income is also seen falling 30 percent from the record just reported. Global retail sales are forecast to dip 1.3 percent to 10.95 million vehicles this fiscal year, from last fiscal year’s record 11.09 million. Hybrids hot Toyota continues to bank on its trademark hybrid technology.  Toyota sold about 3.7 million hybrids in the just-ended fiscal year, up 32 percent from 2.8 million year before. Hybrids were one-third of global volume, up from 26 percent. That trend will continue. Toyota sees hybrid sales zooming ahead 25 percent to 4.65 million this fiscal year. And they are likely to account for 42 percent of global volume. EV optimism Sato said EVs still are not ready for prime time and that his short-term outlook is conservative. The infrastructure is not there to support widespread battery-electric vehicle use, and the value-added proposition of EVs still is not attractive enough for mainstream customers, he said.  But after 2026, the “situation might change,” Sato said. “So aiming at that period, we would like to make sure that we are ready to provide BEVs in a Toyota way.” Toyota is developing a next-generation EV architecture with a reworked platform and battery system. The technologies will debut in the upmarket Lexus brand and were previewed in concept vehicles at last year’s Japan Mobility Show in Tokyo. What's ahead for North America Toyota’s crucial North American operations bounced back to profitability in the fiscal year ended March 31. No longer hobbled by the pandemic or semiconductor shortages, the automaker recorded operating profit of 506.3 billion yen ($3.35 billion), reversing an operating loss of 74.7 billion yen ($493.7 million) the year before. Sales climbed 17 percent to 2.82 million. Nonetheless, Toyota was also cautious about the coming year. As U.S. pricing pressure heats up, CFO Yoichi Miyazaki said Toyota will join the fray of competitors raising incentives. Toyota needs to do that to capture volume, he said.