11/01/2004

Toyota, records Record Sales and Profits

Toyota reported record sales and profits for the period ending Sept. 30th. The extraordinary results cam after strenuous cost cutting and marketing effort by the Tokyo-based auto maker. The auto makers net profit jumped 11.4 percent from a year earlier 584 billion yen, or form 153 yen per share to 176 yen per share. Also Toyota Consolidated posted a record high 1.16 trillion yen of net profit for the business year ending March 31st 2004. Toyota said that cost-cutting efforts and marketing boosted net profits by 260 billion and 70 billion yen respectively.

With such phenomenal results from cost-cutting and marketing, American manufacturers must be wondering what marvelous cost cutting maneuvers have the Japanese invented now. If anyone is wondering why American jobs being outsourcing is such an attraction for American businesses, this is a prime example why. With consolidated net profit of 1.16 trillion yen in a single business year, American businesses must able to cut cost wherever possible. There hasn't been this large of a increase in Toyota's implementation of JIT, and other cost cutting manuevers of the 1980's.

This was found at http://www.msnbc.msn.com/id/6380984/.

10 comments:

Biancca said...

I was under the impression that the cost cutting had to do with lay-offs. In tax class we talked about recent tax breaks for businesses. I guess buying equipment became less "taxable" if you will, so businesses started buying robots that they couldn't aford before that replace workers.

pramahaphil said...

Cost cutting doesn't necessicarily mean that there are layoffs that are occuring, Toyota may have found more efficent production methods.

peter_parker said...

Just a question, where do US automakers out source most of their jobs to? I tried to research a little without any luck. Maybe you happen to know where?

Joe said...

Cost cutting is a continual process not necessarily layoffs. Businesses need to constantly try to use the best cost method. It needs to be on the minds of American business owners now more than ever.

John West said...

Leave it the Japanese automakers to once again out-do the boys in Detroit. Toyota is a good company and they are known for reliable, quality cars. Ford and GM could learn a lot from the Japanese and I'm sure that they have many such consultants on their payrolls.

Rufio said...

Kaizen (continuous improvement)is the key. Kaizen management has been a part of Toyota's management for sometime. It involves workers giving suggestions on how to make the car building process more efficent. As long as the company improves a little bit each year profits will continue to rise. I don't think that Detroit will be able to compete with the Toyota until it can master the art of Kaizen. My only question is that if workers are helping to continually improve are they getting a piece of the pie, and is this piece large enough to encourage efficiency?

Bryce Larkin said...

I believe the increase in sale for Toyota is also due to the high prices of gas. Most Toyotas are known for their high miles per gallon.

Bryce Larkin said...

Also, one think the Japanese are good at is finding a new way to cut costs. In American companies, we are trying to do the same but the Japanese are the leaders. Cutting cost is the best way to increase your profits.

Dr. Tufte said...

-1 on Bryce (I'm going to count the two consecutive comments as one).

This is all good for a ManEc class. One of the great things for a manager about cutting costs is that you are not at anyone else's mercy - if you cut costs, you reap the benefits.

One strategic advantage for Toyota of cutting costs now is that demand is so high for everything worldwide (this is the best year for the world economy in 30 years). This means they have a big fat profit cushion that they can use to help workers maintain workers' morale in other ways.

As to Peter_Parker's question about outsourcing, there is no data on where jobs are outsourced to. Outsourcing has been around for a long time, but it wasn't on anyone's radar screens for a long time, so it isn't measured well.

Maudi said...

Unlike the American auto industry the Japanese are constantly improving and adjusting to the market trends. It is unfortunate that the Americans take so long to change. It seems like the Japanese companies like Toyota can make changes and adjust to the market over night. American's however cannot, we need to be better at change and learn to correct ourselves quickly when things aren't working.