After A Tough Year, Toyota Struggles To Mend Hit hard by Japan's earthquake, Toyota Motor Corp. saw its net profit drop more than 75 percent in the latest quarter. Given other disadvantages — including the appreciating yen, and last year's auto recalls — the company is having a hard time getting its operations back on track.
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After A Tough Year, Toyota Struggles To Mend

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After A Tough Year, Toyota Struggles To Mend

After A Tough Year, Toyota Struggles To Mend

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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While Japan struggles to re-imagine its energy industry, its biggest automaker is also struggling to keep its footing in the global marketplace. Toyota has been suffering from ongoing parts shortages and production delays. And today, it announced that its most recent quarterly profit fell by more than 75 percent. What's more, Toyota says, the outlook for the next year is uncertain.

Here's NPR's Sonari Glinton.

SONARI GLINTON: As of late, Toyota has had a lot of problems, and they aren't just tied to the massive earthquake and tsunami. Aaron Bragman is an analyst with IHS Automotive. He says the list is long.

Mr. AARON BRAGMAN (Analyst, IHS Automotive): Such as the appreciation of the yen. Such as people not buying Toyotas at the same rate globally that they used to. Such as an older product lineup that hasn't been refreshed as fast as some of their competitors.

GLINTON: Let's look at those problems separately for a moment. First, the yen gaining value against other currencies like the U.S. dollar. That means...

Mr. BRAGMAN: Vehicles that are manufactured in Japan are not nearly as profitable when they're sold in the U.S. as they used to be.

GLINTON: That puts Toyota at a disadvantage. Toyota makes almost 40 percent of its vehicles in Japan while its Japanese rivals, such as Honda and Nissan, only make about 25 percent there. So the yen problem and even the production delays because of the earthquake and tsunami have hit Toyota harder.

Then there's the problem of global sales.

Mr. BRAGMAN: They may have increased sales in Asia, non-Japan Asia, like China, but they're still not selling anywhere near the rates that a lot of their competitors like General Motors and Volkswagen are selling. There's issues between China and Japan politically.

GLINTON: And foreign markets are crucial for Toyota. So what can it do to dig itself out of the hole?

Jim Wiseman is with Toyota North America.

Mr. JIM WISEMAN (Toyota North America): What we try to do is just focus on, OK, the Toyota way is to look at where problems exist, fix them, keep trying to get better. And we're all over it.

GLINTON: Wiseman points out that while recently things have been bad for the company, over the last 12 months, Toyota has been profitable and sold more cars. That's despite everything.

Mr. WISEMAN: We've had several challenges over the past few years, first with the downturn in the economy a couple years back and then the recalls that we went through last year. But overall, I think those of us at Toyota are very optimistic about what's happening going forward.

Ms. MICHELLE KREBS (Senior Analyst, Lots of times a stumble by another automaker gives another advantage.

GLINTON: Michelle Krebs is with the car website She says Toyota is still struggling to live down the damage because of what happened with last year's recall.

Ms. KREBS: What that did was planted in the mind of the consumer that this isn't the absolute bulletproof quality that people had been led to believe. And so it caused people to look around. It became OK to buy a Hyundai Sonata instead of a Toyota Camry, for instance, and that has stuck.

GLINTON: Analysts say the real question is whether Toyota has lost the momentum it's been building for the last 20 or 30 years. If so, can it get back its mojo?

Sonari Glinton, NPR News.

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