Toyota back in the black, but not by its own standards

DETROIT -- I can’t count the number of times Toyota executives have spoken, publicly or to me personally, about the importance of monozukuri -- making things. Toyota was not interested, they sometimes stated and always implied, in playing financial games.

When General Motors or Ford would earn more from their financial arm than from their car-making business, Toyota’s top brass clearly considered that an unfortunate case of the tail wagging the dog.

Have you seen Toyota’s results for the most recent quarter?

Kohei Takahashi has. After crunching the numbers, the J.P. Morgan auto analyst estimates that financial services accounted for 90 percent of Toyota’s operating profits in North America.

Indeed, look at Japan, North America and Europe, and what do you find

“Manufacturing in advanced countries, which accounts for about two-thirds of sales, contributed almost no profits” in the quarter ended June 30, Takahashi wrote in a recent report.

Oh, manufacturing still made up the bulk of Toyota’s profits. But they came from China, southeast Asia and other developing markets. Takahashi figures those emerging markets contributed 62 percent of Toyota’s operating profits.

Some folks are interpreting Toyota’s return to black ink as a sign that the automaker is back. But I’d say that by Toyota’s own standards as a company devoted to manufacturing, the Japanese giant is not out of the woods yet.