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Toyota Takes One On The Chin: Profits Fall 28% For The First Quarter of 2008

Agent009 submitted on 8/7/2008 Official Bell & Ross Timestamp: 9:48:04 AM

36 user comments | Category: Misc News | Source: | SOURCE: online.wsj.com

Slumping US sales of trucks and sports-utility vehicles contributed to a 28% drop in Toyota Motor Corp's net profit for its fiscal first quarter to June 30, even as demand soared for its fuel-efficient models.

Income for the Japan's No. 1 auto maker by sales volume was also battered by a stronger yen, which reduces the value of overseas earnings, as well as higher material costs and losses from vehicle leasing in the U.S.

The weak results are a rare setback for Toyota, whose rapid expansion in sales and profit growth this decade once appeared to be immune to hardships facing other auto makers.

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love this
— carguy68 (View Profile)

Posted on 8/7/2008 10:48:20 AM | reply to this comment | Votes: 4

ouch.
— Htay7500 (View Profile)

Posted on 8/7/2008 10:58:09 AM | reply to this comment | Votes: 5

Here is a stat for all the pro-Lexus and Toyota fans that cant wait to bash BMW and everyone else cause of their great residual values and how they dont lose money.

Last sentence " Toyota set aside ¥9 billion this quarter to cover leased vehicle losses." What does 9 billion yen convert to in American dollars for the amount of money that Toyota & Lexus will lose due to slumping resale value and inflated residuals ? lmao ... it is alot more than BMW loss ..
— BMW4me4ever (View Profile)

Posted on 8/7/2008 11:21:46 AM | reply to this comment | Votes: 1

Isn't Toyota like a hundred time bigger than BMW? So, keep it in perspective. BMW took a harder hit.
— VISO (View Profile)

Posted on 8/7/2008 1:17:53 PM | | Votes: -1

Think about what you're saying. If they're 100 times bigger, then a 28% drop in profits for Toyota is astronimical compared to a 33% drop for BMW. The percentages are similar, but imagine how much more money that is that Toyota just lost.
— JRobUSC (View Profile)

Posted on 8/7/2008 1:24:30 PM | | Votes: 0

viso . Yes toyota is a larger company. Year to date Lexus is down almost 10% more than BMW. I promise you that if Toyota broke out the figures that Lexus would be alot further down than BMW. The 9 BILLION YEN equated into US dollars is ALOT more than 300 to 400 million that BMW wrote off in lease values. This is just for leases. VISO think of it like this, LEXUS in the US is for the last 3 months is down 22%, 19% & 24%. That is huge and with no new models aside from the RX due out for the next few years, they are in alot of trouble.
— BMW4me4ever (View Profile)

Posted on 8/7/2008 1:26:44 PM | | Votes: -1

9 billion yen is about $85 million based on the recent exchange rate.
— sracekili (View Profile)

Posted on 8/7/2008 1:43:54 PM | | Votes: 3

LOL @ BMW4me4ever after sracekili's comment. Guess you should have done the math before opening your mouth BMW4... LOL
— 0to60 (View Profile)

Posted on 8/7/2008 8:43:25 PM | | Votes: 2

lol...I'm a fan of both BMW and Lexus, so I'm good with what you said 'cause it's true.
— WorldofLuxury (View Profile)

Posted on 8/8/2008 12:36:32 AM | | Votes: 0

surprise surprise. Where are huu76 and Staar? This sounds EXACTLY like what I said the other day. It's too bad Toyota won't release the information JUST FOR LEXUS, because I promise you that 33% profit drop BMW had that you were going on and on and on about would look pretty nice compared to a brand who can't sell cars outside the U.S. and is getting just destroyed right now by the exchange rate.

But I'll be the bigger man here and accept your apologies. I know you won't offer one because you're petty trolls, but I'll accept it anyway and let bygones be bygones... until the next moronic troll thing you say.
— JRobUSC (View Profile)

Posted on 8/7/2008 1:21:15 PM | reply to this comment | Votes: 3

Ummm...isn't any profit a good thing? Earning $3.2 billion (source detnews.com) for the quarter I would consider as being good. I mean this is the amount you make after paying off all your employees, supplies, and costs to do business...you're still putting that much in the bank. I mean it's better than losing $15 billion for the quarter, isn't it????
— mkk21 (View Profile)

Posted on 8/7/2008 3:13:50 PM | reply to this comment | Votes: 5

I don't think anyone was comparing GM to toyota here
— Targa (View Profile)

Posted on 8/7/2008 4:16:42 PM | reply to this comment | Votes: -1

I'm one scared salesman. Shakin in my boots!!! Sales are down! Oh no! I won't get paid! No more lay downs! Oh wait, food still sells, and Wendy's is hiring. Sweet.
— drake0707 (View Profile)

Posted on 8/7/2008 8:08:00 PM | reply to this comment | Votes: 0

So it isn't just American car companies that depend on truck and SUV sales
— komododave (View Profile)

Posted on 8/7/2008 9:26:14 PM | reply to this comment | Votes: 0

Yes this is a big loss for Toyota, but they tend to study and learn from mistakes. Toyota is a very process driven company and will make adjustments quickly. Toyota has been owning up to mistakes and is now making changes needed to thrive, like building the 2010 Prius in Alabama. Other companies and the govt. could learn something from Toyota.

— g2ok (View Profile)

Posted on 8/8/2008 12:51:13 AM | reply to this comment | Votes: 1

see below. toyota is doing horriby in the US market.
— enthusiastx11 (View Profile)

Posted on 8/8/2008 1:27:22 PM | reply to this comment | Votes: -1

that's globally. profit is down FAR MORE in north america where they have to give away cars. per today's new york times, "Toyota said that its net income in North America fell 57 percent, to 69.1 billion yen in the quarter."

yes, that's profit down 57 percent--about 9 times greater decline than units sold.

http://www.nytimes.com/2008/08/08/business/worldbusiness/08toyota.html?_r=1&ref=business&oref=slogin
— enthusiastx11 (View Profile)

Posted on 8/8/2008 1:26:18 PM | reply to this comment | Votes: -2

Hey huu76, Lexus1, and Staar -- guess who else would be affected similarly? That's right, Lexus. That's what happens when no one outside the U.S. buys your cars and the economy of the only market you're successful in is in the toilet.

Ordinarily I wouldn't gloat or throw out the perverbial "told you so"... but in your cases I'll make an exception, because you jackasses deserve it. Where's the troll smack talk about BMW profits dropping 33% for the quarter now? I bet you know where you can stick that. You must be thanking God, Sheba, Mohammed, and any other deities that will listen to your sorry asses that Toyota won't release Lexus's financials indepently, because you'd look really, really stupid right now.

End of gloating.
— JRobUSC (View Profile)

Posted on 8/8/2008 3:15:37 PM | | Votes: 0

just the facts kids.
deboost all you like.
it's not an opinion.

profit down 57 percent.
that's horrible financial news.
— enthusiastx11 (View Profile)

Posted on 8/8/2008 8:27:26 PM | | Votes: 1

right here jr., I've been busy signing contracts and making money to buy the cars that people here pretend they own.

Difference is Toyota profits dropped approx the same rate as sales dropped. BMW sold the same # of units but amazingly were successful at reducing profit by 33%.

9,000,000,000 yen is like 90 million US. (using 1/100 ration, its actually even less). What was BMW's write-off, 300 million USD?

Lets See, Toyota is 6x larger yet only wrote off a 1/3 of what BMW did.

btw Jr, my industry is immune to economic downturn.

So what was it that you were saying, "You told me so?" I think not.
— huu76 (View Profile)

Posted on 8/8/2008 7:03:38 PM | reply to this comment | Votes: 0

you're making money? whatcha driving?
— enthusiastx11 (View Profile)

Posted on 8/8/2008 8:29:09 PM | | Votes: 1

Toyota's sales didn't drop 57% smart guy, only the money did. You were all over BMW for a 33% profit drop. Well, Mr. Finance, you're lucky Toyota shields Lexus from public scrutiny, because their numbers would be even worse. Toyota, who does successfully sell cars worldwide, is bouying Lexus, who does not. If Toyota's numbers are down that much, primarily because of the U.S. market, imagine how much worse Lexus's numbers are, who doesn't sell squat anywhere else. Lexus would be a giant red stain on Toyota's financial sheet... if they had the balls to release them. And until they do, you're a giant hypocrite.
— JRobUSC (View Profile)

Posted on 8/9/2008 9:48:25 AM | | Votes: 3

I always thought Germans were good at commerce, apparently they're not.

You make more money by charging people 6-9% financing rather than paying them to take cars off your lot (i.e. BMW and MB with their cash rebates and 20% discounts, which is waht 0.9% works out to be after 5 years).

I'd say the German field of expertise is marketing.
— huu76 (View Profile)

Posted on 8/8/2008 7:05:38 PM | reply to this comment | Votes: 0

Huu, this isn't 3rd grade -- just because one number is higher doesn't mean you're going to make more money. You see, if you're charging 6-9% and other banks are charging less, guess what? You're not making more money, because no one is going to contract on your paper. If Toyota Financial Services charges 8.5%, as you've said 100 times, then only an idiot would sign up for a loan through them when you can get 5% through another lender.

So which it? Is Lexus not charging 8.5%? Or is your buddy/brother/brother's buddy an idiot? I'm guessing "guilt by association". Hopefully you can at least figure out what that means.
— JRobUSC (View Profile)

Posted on 8/9/2008 9:54:13 AM | | Votes: 2

enthusiast,
Excuse me, Toyota giving away cars? I guess if you believe what Toyota does and say 8.2% financing is a competitive rate while you make buyers pay $8800 down.

BMW charging 0.9%, giving away free automatic transissions and $0 downpayment. What does that sound like? Sounds like they're crapping themselves wondering what they're going to do now that their brand can nolonger demand a premium.
— huu76 (View Profile)

Posted on 8/8/2008 7:10:52 PM | reply to this comment | Votes: 0

For starters, Lexus gives you a free automatic transmission in their cars too, it's built into the price. Second, Lexus is offering 2.9% financing, not 8.5% (or 8.2%, or whatever -- the rate changes every time you tell the story, as does the person who bought the car). Finally, manufacturers don't "make" people put $8800 down. Banks do. And they only "make" you put $8800 down and give you a finance rate that is 3% over prime on top of it if your credit sucks. So that has nothing to do with the car manufacturer, it has to do with your friend/brother/brother's friend/whoever is buying the imaginary car in your story this time not paying his bills. Tell him to start making his payments, next time he can take advantage of the special rates Lexus is running.
— JRobUSC (View Profile)

Posted on 8/9/2008 9:38:23 AM | | Votes: 2

Looks to me like they still made 4.5 billion in the first qtr.and forcast to earn another 10 to 10.5 billion for the year.That's 15 billion for the year.Add that to the 65 to 75 billion they have in cash and they still could buy bmw and mercedes cash.Game over!!!!!!!!!!
— truthpursuit (View Profile)

Posted on 8/8/2008 8:17:42 PM | reply to this comment | Votes: 1

jr,
Go check out the rates, 5.9% to 9.9% depending on what you buy. Lexus falls right in the middle of that.
http://www.toyota.ca/cgi-bin/WebObjects/WWW.woa/29/wo/Home.TFS-bIZ1Igj1iFI52E15FiKGAw/5.9

Facts suck don't they? Sorry, BMW was charging the same price for the cars with free autos as the ones that didn't have them before, so free is free. Plus 0.9%, plus $0 down.
Lexus knows most people don't want manual, so they work it in the price. Bottom line, BMW isn't charging anymore for the auto, hence its FREE.
— huu76 (View Profile)

Posted on 8/9/2008 7:18:20 PM | reply to this comment | Votes: -1

I'm in the U.S. there chuckles. I don't care what BMW or Lexus do in Canada. BMW and Lexus hardly care what they do in Canada, they're more focused on their largest market, which is the U.S. Here Lexus is running 2.9%. "Facts suck, don't they?"
— JRobUSC (View Profile)

Posted on 8/10/2008 1:30:08 PM | | Votes: 2

This is disgusting. Toyota charges 7.75% and up on used vehicles (even 9.95%) and 8.95% on uses leases.
http://www.toyota.ca/cgi-bin/WebObjects/WWW.woa/29/wo/Home.TFS-bIZ1Igj1iFI52E15FiKGAw/7.11.10

BMW still can't move their crap boxes at 0.9% used finance, 1.9% used lease.
— huu76 (View Profile)

Posted on 8/9/2008 7:21:06 PM | reply to this comment | Votes: -1

that why people aren't taking loans through TFS. they're going to other institutions.
— enthusiastx11 (View Profile)

Posted on 8/9/2008 10:13:03 PM | | Votes: 1

last I checked, and I mentioned this already, you are not required to take out a loan through Toyota Financial when you buy a Lexus. Pretending for a second that you're not totally full of $hit, if your brother/friend/brother's friend got an 8.5% loan with $8800 down it's because he has bad credit, and that's hardly the fault of the lender. With good credit a normal bank would have given him 5% with nothing down. So either he has bad credit, he's stupid, or you're a liar. And frankly I don't really care which one it is, I've proven my point. Repeatedly. Next.
— JRobUSC (View Profile)

Posted on 8/10/2008 1:35:43 PM | | Votes: 1

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Toyota Takes One On The Chin: Profits Fall 28% For The First Quarter of 2008

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