The largest automaker in the world, Japan’s Toyota Motor, has just wrapped another record fiscal year and already forecasts it would surpass it during the next thanks to strong growth in the United States and the cost cutting strategy.
The third record net profit will be achieved on the back of expanding sales in the US auto market, the world’s second largest and thanks to the implemented cost reduction strategy, which will be enough to surpass losses seen in other regions – with the record financial results also buoyed by the favorable currency gains. For the quarter that ended in March the company has said its net income jumped 50 percent and the Japanese firm has predicted its full fiscal year (which started in April) would soar by 3.5 percent to 2.25 trillion yen – around $18.75 billion. The prediction is based on an average currency exchange rate of 115 yen to the dollar, which could be conservative since the quotation has already reached 120 yen to the dollar – which could drive the profit further up to around 2.44 trillion yen. The record financial results also come alongside a healthy strategy imposed by the President Akio Toyoda – an “intentional pause” brought by the grandson of the company founder. Under the plan, Toyota would carefully pace itself to achieve a sustainable sales increase, after for years it was plagued by overcapacity and quality issues that led to the 2010 record recalls.
Now, the strategy will change its pace as the complete overhaul brought under the new initiative Toyota New Global Architecture – TNGA – comes into effect. The plan is to drop development and production expenses and redirect some of the savings towards delivering more appealing models. The cost reductions would also be rerouted towards new technologies, including the fuel cell model development or advanced safety features. The company is also expecting better financial results while its global sales are forecasted to slide 0.8 percent to 8.9 million units.