Didier Leroy, chief executive of Toyota Europe, told Automotive News that its automotive operations will post a profit in the current fiscal year, which ends in March 2013, despite a difficult market in the region. Leroy forecasted that Toyota Europe would post a profit earlier this year, before economic conditions in Europe started to get worse.
Toyota attributed the financial turnaround of its European operations to a deep restructuring that commenced in mid-2010. The cost cuts made it viable for Toyota Europe to turn a profit at a volume of over 800,000 vehicles, the same figure that the carmaker expects to sell in the region in its fiscal year ending in March 2013. In the past, Toyota Europe’s automotive business posted losses despite selling more vehicles.
The carmaker’s automotive unit last posted a profit in 2007, when it sold a record of nearly 1.3 million vehicles in Europe. But the unit’s fortunes started to fall thereafter.
Toyota has been making up for the losses of its automotive unit through a strong performance by its financial services unit, allowing it to post a combined consolidated profit in Europe. Leroy is expected to make all divisions of Toyota Europe become successful, and there are indications that he’s making good progress.
In the first half ended Sept. 30, 2012, Toyota Europe posted a 14.1-percent increase in vehicle sales to 412,000 units and a JPY12 billion (EUR114 million) operating profit for the consolidated business.
In the first half ended Sept. 30, 2011, Toyota Europe’s combined operating losses were JPY1.9 billion yen. Toyota considers Europe as its fourth-largest market, after North America, Asia (excluding Japan) and Japan.