Akio Toyoda says long-term sustainable growth is more important than short-term profits.

Toyota is worried, and for good reason. The world’s second largest automaker posted a 20.8 percent drop in net income for its fiscal year, which ended on March 31. Operating income was down 30 percent for the same period. In North America, Toyota’s sales for April were down 4.4 percent, continuing the trend which started in January with an 11 percent drop. According to Automotive News, Toyota expects another 20 percent drop in operating profit for the current fiscal year.

Read also:

The drops come after years of growth capped with back-to-back record sales years leading up to the sharp decline, and Toyota President Akio Toyoda is justifiably concerned. In a press conference, Toyoda said he felt “a strong sense of crisis about whether or not we are actually executing car-making from the perspective of the customer in all Toyota workplaces.” He also emphasized that the company’s focus remains on long-term, sustainable growth versus short-term profits, and pointed to compact cars as well as developing autonomous technology as the path to the future.

“It is my view that our latest financial results demonstrate Toyota's desire to steadily and continuously advance our investment in the future, rather than place top priority on short-term profit,” said Toyoda. “The present automobile industry is being asked to make a paradigm shift, for which, as I see it, especially AI, autonomous driving, robotics, connected systems, and other new domains will hold important keys."

Toyota’s woes come amid recent announcements of layoffs from both Ford and General Motors. The American manufacturers are experiencing similar drops in sales, causing Ford to cut jobs at its truck plant in Avon, Ohio. General Motors is idling 600 employees at its Delta Township plant near Lansing, Michigan.

Source: Toyota, Automotive News

Be part of something big