Toyota president feels 'sense of crisis' as profits tumble
05-11-17, 06:57 AM
#31
Pole Position
Toyota would have accrued an estimate and expensed that waaay back when. Whatever payment is against the accrual and only affects cash flow. If the payments are more than what they estimated and it is material, they will have to disclose it in their financial statements, which they did not.
05-11-17, 07:29 AM
#32
Lexus Champion
You don't understand what the article is talking about. Sales are not poor, sales aren't down. Profitability is down. In fact, sales are up and revenue is up. PROFIT is down.
Just because one company sells more products doesn't at all mean they are more profitable. It's very possible for a company to sell far more product than a competitor and yet be far less profitable.
As for any unintended acceleration settlements, I agree this is a non issue. Thinking it is shows a lack of understanding about the scale of what we're talking about here. Those settlements were like you and me paying a $50 parking ticket, it has no impact on our bottom line.
Just because one company sells more products doesn't at all mean they are more profitable. It's very possible for a company to sell far more product than a competitor and yet be far less profitable.
As for any unintended acceleration settlements, I agree this is a non issue. Thinking it is shows a lack of understanding about the scale of what we're talking about here. Those settlements were like you and me paying a $50 parking ticket, it has no impact on our bottom line.
If profit is down despite increased sales, it may be a sign that the automaker cannot make money on the products it sells. That is in part what led GM into bankruptcy; it cost more to build its cars than what they were sold for.
05-11-17, 07:42 AM
#33
Lexus Fanatic
GM had a whole lot of expenses that Toyota doesn't have. What bankrupt GM was their unsustainable retirement obligations.
05-11-17, 10:39 AM
#34
Lexus Fanatic
As for any unintended acceleration settlements, I agree this is a non issue. Thinking it is shows a lack of understanding about the scale of what we're talking about here. Those settlements were like you and me paying a $50 parking ticket, it has no impact on our bottom line.
05-11-17, 10:54 AM
#35
05-11-17, 11:02 AM
#36
Lexus Fanatic
Originally Posted by mmarshall
I have to disagree that it is totally a non-issue. First, while it is true that Toyota is a huge company, with very deep pockets (and can withstand a lot of expenses), we don't know yet what all of the settlements will be....cases like this are notoriously slow (including appeals) getting through courts. Second, Toyota is not only dealing with unintended-acceleration cases, but also a large class-action suit involving the rigidity and corrosion resistance of their truck-frames.
05-11-17, 11:37 AM
#37
Lexus Fanatic
With respect, you don't really understand the financial realities we're dealing with. Class action suits and settlements are a cost of doing business with these companies, it does not impact their profitability except in extreme situations. This is simply not the issue here.
05-11-17, 11:40 AM
#38
Lexus Fanatic
It truly is like you or me having a speeding ticket. Or paying a $1000 fine. It sucks, we'd rather not, but it doesn't hurt us.
05-11-17, 12:21 PM
#39
Lexus Test Driver
Toyota needs to read up on GM and not follow its mistakes.
Scion was a huge failure and so are the hybrids especially with the low gas prices.
Add increased competition from new players - all add up to smaller profits.
This may not be easy for them to turnaround.
They need innovation ASAP and quality to return back to their products.
Besides reliability, they really offer nothing over their rivals - and that competitive advantage is decreasing each year.
Last edited by RNM GS3; 05-11-17 at 12:24 PM.
05-11-17, 12:46 PM
#40
Pole Position
I have to disagree that it is totally a non-issue. First, while it is true that Toyota is a huge company, with very deep pockets (and can withstand a lot of expenses), we don't know yet what all of the settlements will be....cases like this are notoriously slow (including appeals) getting through courts. Second, Toyota is not only dealing with unintended-acceleration cases, but also a large class-action suit involving the rigidity and corrosion resistance of their truck-frames.
Toyota would have accrued an estimate and expensed that waaay back when. Whatever payment is against the accrual and only affects cash flow. If the payments are more than what they estimated and it is material, they will have to disclose it in their financial statements, which they did not.
05-11-17, 12:54 PM
#41
Moderator: LFA, Clubhouse
Unit sales can be up but Toyota and Lexus rebates/incentives have been at all time highs the past few years to move that inventory. Fleet sales are also increasing.
Toyota needs to read up on GM and not follow its mistakes.
Scion was a huge failure and so are the hybrids especially with the low gas prices.
Toyota needs to read up on GM and not follow its mistakes.
Scion was a huge failure and so are the hybrids especially with the low gas prices.
I don't disagree with your conclusion that Toyota needs to innovate (I just criticized TMC in another thread here for that) - but some of the narrative here doesn't at all match reality.
05-11-17, 01:06 PM
#42
Lexus Test Driver
My point with hybrids is that Toyota made a very significant bet on them but they never really took off.
I may be wrong but i doubt they have realized their projected return on the original Hybrid investment hence their hesitation to develop full EV cars.
Also hybrid sales in US are heavily driven by subsidies both from government and manufacturer.
In Japan, foreign brands cant compete on equal playing field and Toyota runs the place since they are by far the largest Japanese auto company.
I may be wrong but i doubt they have realized their projected return on the original Hybrid investment hence their hesitation to develop full EV cars.
Also hybrid sales in US are heavily driven by subsidies both from government and manufacturer.
In Japan, foreign brands cant compete on equal playing field and Toyota runs the place since they are by far the largest Japanese auto company.
Last edited by RNM GS3; 05-11-17 at 01:11 PM.
05-11-17, 01:25 PM
#43
Lexus Fanatic
Just to be clear, there are no federal subsidies in the US for hybrids any longer. Plug in hybrids get some but not regular hybrids.
05-11-17, 01:35 PM
#44
Lexus Test Driver
05-11-17, 02:36 PM
#45
Lexus Fanatic
But only one Toyota hybrid qualifies for that subsidy, the Prius Prime. None of the other Toyota Hybrids or the Lexus hybrids do, so their sales are not driven by subsidies. Plug in hybrid subsidies are way lower than that too, the $7,500 is really for an EV.