Toyota Makes Unexpected Profit After Summer Scrappage Scheme
Posted by Neil Payne on November 5th, 2009Toyota, the world’s biggest carmaker, has unexpectedly clawed its way back to profit after a summer of scrappage incentive schemes in the US and Europe and a round of ferocious cost cutting. But the company was swift to quash any premature optimism over the state of the American car market, where it said conditions were still “very severe” and the company is battling to limit the damage of a 3 million-vehicle recall.
The company is also mulling over plans to significantly bolster its research and development presence in China – a market that it has failed to exploit with anything like the efficiency it has penetrated Europe and the US. The local R&D base would supposedly allow the Japanese company to better tailor its vehicles to the local market.
Toyota Boosted By Scrappage Scheme
Toyota’s return to profit followed the announcement on Wednesday that it would leave Formula One racing before the 2010 season begins – a move that may save the company about $300 million (£181 million) a year, but which will cause an estimated $200 million of international brand exposure to vanish overnight. The company’s tearful public withdrawal from the sport, said analysts, portends further aggressive cost-cutting.
The glimpse of Y21.8 billion (£146 million) of black ink at the end of the July to August quarter was a welcome surprise for investors, but is unlikely to prevent the carmaker from logging its first full year of losses since Toyota switched from making sewing looms to cars 60 years ago.
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