For the first time since 2007, Toyota Motor Corp will report a profit in its European automotive business for the present fiscal year. Toyota expects to achieve the same feat in fiscal 2013 as its new models grab a bigger part of the market from its competition. Didier Leroy, the head of Toyota's European operations, said that the company doesn’t yet know what the volume would be in 2013 but it hopes to post more sales than in 2012.
Leroy has been dealing with the restructuring of Toyota's business in Europe since 2010. At around the same time, Toyota struggled through a safety dilemma in the U.S. and the natural disaster in Asia. Toyota implemented cost cuts, including a 40% decrease in its workforce at its Brussel headquarters, helping increase its bottom line in Europe during fiscal 2012, which is set to end this month.
Toyota’s market in Europe includes 56 countries, including Israel and Russia. Using this coverage, Toyota sales increased by 2% last year. But as defined by trade association ACEA (that only includes 27 countries), Toyota's car sales in Europe declined by 3% in 2012.
Nevertheless, this is still better than the 8.2% drop experienced by the entire auto industry in Europe, where the financial slump has led to the drop in auto sales, according to ACEA data. Toyota believes that it will report increases in sales and market share next year due to new models, higher capacity utilization at its factories and additional cost cuts.
Karl Schlicht, Toyota's head of European sales, told media before the Geneva car show opened that Toyota recognizes that it will benefit from the higher popularity of hybrids, which have hit a "tipping point" in Europe.
Toyota believes that hybrids will make up at least 17% of its sales in Europe in 2013, an increase from 13% in 2012. Tom De Vleesschauwer, director of long-term planning and sustainability for IHS Automotive, said that Toyota is trying to make up for the ground it lost in the past two years by offering a renewed product range.