Key Takeaways From Toyota’s Q1 – Forbes

Posted: Tuesday, August 08, 2017

Toyota Motors announced its fiscal Q1 2018 results on August 4, reporting a 7% increase in net revenues on a consolidated basis as vehicle sales grew by 43,000 units year on year. However, the company witnessed a nearly 10% decline in operating income due to currency fluctuations and growth in expenses. This is in line with the company’s guidance for 2017-2018, as it expected an 18% decline in operating income for this fiscal year. However, Toyota did see sales growth in the quarter, and the company now expects a lower decline in operating income for the fiscal year.

Below is a summary of the company’s performance for Q1 2018.

From the above table it can be seen that Toyota saw the most significant decline in operating income in North America. This decline was primarily due to increased marketing expenses in the region. Japan had a strong quarter, driven by increased vehicle sales and cost reduction efforts.

Below is a summary of the company’s revenues broken down by region and segment:

Going Forward:

  • Toyota expects consolidated vehicle sales for fiscal 2018 to be around 8.9 million units, and its operating income estimate has been revised upward by 250 billion yen.
  • The company is taking measures to avoid two consecutive years of earnings declines. It is shifting its R&D (research and development) resources to areas such as autonomous vehicle technology and new energy vehicles to adapt to the changing landscape of the automotive industry.
  • Toyota is also looking to review its current models to maximize vehicle sales and profitability and resolve the gap between supply and demand.
  • The company is also looking to improve its efficiency with solutions such as automating some tasks to bring about cost savings, and using smartphones to resolve problems between domestic and overseas plants on a real time basis.

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