Following setbacks from a natural disaster and increasing valuation of the yen, Toyota has been fighting back with an aggressive growth strategy to increase sales and profitability. Reinforcing that plan is an emphasis on selling more hybrids and lower priced cars both at home and abroad.
Having regained its place as world’s largest automaker last quarter, the company says that because of gasoline price increases in the U.S. and eco-friendly vehicle incentives at home, it expects sales of hybrid models to increase during 2012.
It also expects the impact of the 2011 Japan earthquake and tsunami, plus flooding in Thailand on the company’s profits to significantly lessen this year, aided by measures designed to boost earnings.
Some of those include setting up a high-efficiency engine assembly plant in Japan that can make a profit despite delivering half the volume, as well as setting up facilities in developing markets such as Brazil and China. These plants will produce low-priced mass-market vehicles, thereby minimizing the impact of currency exchange rates.
If the company proves successful with this approach as well as developing new marketing initiatives to support new models, it might just achieve its goal of 1 trillion yen in operating profit by the year’s end.
And if it does so, it would mark the first time since 2007 that the company has reached that 1 trillion yen target.
However, there are several factors, which could still mean a bumpy road ahead for Toyota, namely the ongoing debt crisis in Europe, which is hampering economic growth and vehicles sales; a still shaky North American economy, plus the possibility that growth in China could slow significantly.
Nonetheless, it appears that under the direction of the CEO Akio Toyoda, the company is doing everything it can to maximize profitability and growth, given current global economic conditions.