TOKYO -- Toyota Motor Corp. does not believe it will be possible to reduce incentive spending in the United States this summer, but it hopes new models this autumn will allow it to trim rebates.
Due partly to higher incentives, Toyota's group operating profits in April through June fell 13.2 percent from a year ago. Operating profits totaled 341 billion yen, or $2.9 billion at current exchange rates.
Toyota's profits fell even though the automaker increased revenues and sold more vehicles worldwide.
Toyota's level of incentive spending "is unlikely to really change until the end of the model year," says Takeshi Suzuki, Toyota's managing officer for finance. The company hopes to reduce incentives as it introduces models, "but we will have to look at the overall market conditions."
Suzuki cited Autodata, which estimates that Toyota's incentives totaled $970 per vehicle. That's up from the first three months of the year, when incentives averaged $690. Autodata reports that Toyota's incentives topped $1,000 per vehicle in July. But that's well below the Big 3, which averaged $4,000 per vehicle.
Despite higher quarterly incentives, Toyota's North American factory sales slipped 0.5 percent. Sales rose in all other regions. Suzuki says Toyota's goal of selling 800,000 cars annually in Europe "is already within reach."
From April through June, Toyota's worldwide revenues rose 5.6 percent to $34.4 billion. But net income fell 9.7 percent to $1.9 billion. Unit sales rose 8.2 percent to 1,594,000.