Toyota's earnings to surge yet again

Posted by: Ian Rowley on October 22, 2007

Toyota’s ascent to becoming the world’s biggest automaker isn’t a forgone conclusion, but don’t expect the company’s execs to be sweating. Sure, the latest data, released yesterday, show that GM has regained the lead over Toyota in the battle to be the world’s largest automaker. For the nine months through September, GM sold 7.06 million vehicles worldwide to Toyota’s 7.05 million.

And it wasn’t the only piece of downbeat sales news recently. In another sign of slowing U.S. auto sales, Toyota Motor Sales U.S.A.’s Bob Carter said on Oct. 19 that the company would cut annual its sales target for year from 2.68 million to 2.6 million units. “We now expect the U.S. car market to shrink slightly this year compared with year-ago, while Toyota continues to strive to meet its initial target,” told Wards.

But when it comes to perhaps the most important measure of corporate success—earnings—Toyota is peerless. Today’s Nihon Keizai, a Japanese business newspaper, reckons Toyota’s interim earnings for the six months ended Sept 30 will once again show stellar, record earnings and strong global sales.

While the company won’t post the figures for a couple of weeks, the Nikkei says it expects Toyota’s operating profit to rise roughly 10% to over $10.5 billion for the six months ended Sept. 30. Sales, meanwhile, are projected to have increased about 10% to nearly $113 billion, despite a prolonged slump in Japan where Toyota’s share exceeds 40%.

Reader Comments

Noz

October 23, 2007 6:45 PM

GM's 7.06m to TM's 7.05m. Interesting numbers. If they were compiled by our government, revisions would be coming along each week or so for a year or more. Even with the two automakers one has to be a little suspicious. Just how do they define 'sales', for example? Not long ago, and for several years running, this was in dispute between Toyota and HONDA. The former sold a lot of cars to the rental agencies while HONDA sold primarily to just plain folks, very few to none to the rentals. Rental company sales are very low profit, they come back to bite you in a year as clean used cars. In the ende, are just a means of dumping.

BUT then there is the 'bottom line', the earnings. Seems to me the winner is the one who banks the most money. These are bragging rights that can be spent to make more, not just pay off horrendous accumulated debt.

Now that GM is relieved of a lot of UAW-imposed costs, we shall see if it can compete. Frankly, with GM's many layers of management as tired and deeply flawed as they are, I doubt they will hack it.

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