Toyota takes 'hard look' at trimming U.S. lineup as profits rise
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News Mexico
  • Automotive News China
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • Turn self-driving cars into offices? That'll take 30 years
      The bus stops here
      Last mile
      Self-driving cars might make people sick to their stomachs
    • GM launches 'Vehicle Locate' app this week
      Audi expanding regions where drivers can 'ride the green wave'
      Former Intel exec to lead Mich. mobility center
      Who wants VW's MEB architecture?
    • Dealerships owned by ex-NFL stars face collapse, litigation
      Want a luxury car? Try a Kia
      Costly lesson of tortuous legal battle: Get it in writing
      Denny Hecker: A changed man?
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Leading Woman Network
    • PACE Awards
    • CES
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Fiat Chrysler
      • Alfa Romeo
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Maserati
      • Ram
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
      • Holden
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • Mitsubishi
    • Nissan
      • Infiniti
    • PSA
      • Citroen
      • Opel
      • Peugeot
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Auto Shows
      • Detroit Auto Show
      • New York Auto Show
      • Los Angeles Auto Show
      • Chicago Auto Show
      • Geneva Auto Show
      • Paris Auto Show
      • Frankfurt Auto Show
      • Toronto Auto Show
      • Tokyo Auto Show
      • Shanghai Auto Show
      • Beijing Auto Show
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • Is Honda's U.K. plant closure the beginning of a Japanese Brexit?
      Tesla introduces 'Dog Mode' to keep pets cool inside the car
      A GM investment in Rivian would send the wrong messages
      Bad policy, worse political strategy on auto tariffs
    • Dealers need to be ready for anything
      EVs will come with economic cost
      Spend money on sales, not stores
      Put it on your bucket list
    • Feb. 15, 2019: EV startup gets Amazon, GM interest
      Jan. 4, 2019 | Bumpy road ahead for Detroit’s automakers and suppliers?
    • Bad policy, worse political strategy on auto tariffs
      Elaine Chao: A speedier path for innovation
      Drivers for ride-hailing services can be a prime source of fixed ops profits
      Dealers' ads for service techs need major repairs to be effective
    • NADA can help fight stair step incentives
      Let dealers invest in innovation, not renovations
      Hackett's vision for Ford is still a blur
      The last temptation of Elon Musk
    • Thank you, Sting, for Oshawa efforts
      Customer-centric approach set Tesla apart
      Cadillac falls short on marketing, luxury
      Deeper issues in tech shortage
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
  • EVENTS & AWARDS
    • Events
    • Awards
    • World Congress
    • Retail Forum: NADA
    • Canada Congress
    • Marketing 360: L.A.
    • Europe Congress
    • Fixed Ops Journal Forum
    • Retail Forum: Chicago
    • Leading Women Conference Detroit
    • 100 Leading Woman
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealership To Work For
    • PACE Awards
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • +MORE
    • Webinars
    • Leading Women Network
    • Custom Features
    • Classifieds
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • Ally: Do It Right
    • Guide To Economic Development
MENU
Breadcrumb
  1. Home
  2. Automakers & Suppliers
November 06, 2018 12:00 AM

Toyota takes 'hard look' at trimming U.S. lineup as profits rise

Hans Greimel
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    TOKYO – Toyota, battling plateauing demand in its biggest market, is reviewing its entire U.S. lineup and could dump nameplates or models that are falling out of favor.

    "We are taking a hard look at all of the segments that we compete in to make sure we are competing in profitable segments and that products we sell have strategic value," Jim Lentz, the company’s North America CEO, said here after the automaker reported a rise in quarterly profits Tuesday.

    Toyota joins automakers including Ford Motor Co. and Fiat Chrysler Automobiles in rethinking product portfolios in a market that is becoming increasingly dominated by light trucks. Lentz said his company will not abandon passenger cars but it is scrutinizing offerings in some areas, such as convertibles or coupes.

    Profits rise

    Toyota Motor Corp.'s operating profit increased 11 percent in the latest quarter as Japan's biggest automaker tapped growing demand for light trucks and cranked up cost cutting.

    Operating profit rose to 579.1 billion yen ($5.09 billion) in the automaker's fiscal second quarter ended Sept. 30, while net income grew 28 percent to 585 billion yen ($5.15 billion).

    Revenue increased 2.3 percent to 7.31 trillion yen ($64.3 billion).

    Global retail sales edged ahead 1.9 percent to 2.68 million vehicles in the July-September period, including results from its Daihatsu small-car subsidiary and truck-making affiliate Hino.

    Worldwide wholesale volume added just 0.4 percent to 2.18 million.

    In announcing the earnings results on Tuesday, Senior Managing Director Masayoshi Shirayanagi partly credited big gains from a richer mix of more profitable models as Toyota concentrates on the booming global demand for crossovers, SUVs and other light trucks.

    Profits also ticked higher as the maker of the Camry sedan and RAV4 compact crossover reigned in incentives and lifted pricing power thanks to a new round of vehicles riding on the company’s modular platform, dubbed the Toyota New Global Architecture.

    The updrafts offset a 20 billion yen ($175.9 million) hit from foreign exchange rates.

    U.S. incentives

    Toyota has also refined its incentive strategy for a more tailored approach, he said. The Toyota brand's average U.S. outlays are down $145 per vehicle this year and are about $1,200 below the industry average, he said. Lexus spiffs are flat, even as the segment's average increases.

    "We're putting dollars where we're going to get the most bang for our buck," Lentz said. "Most importantly today is incentivizing vehicles that are much more profitable."

    While the Toyota brand’s incentives on passenger cars fell 16 percent through September, for instance, spending on light trucks increased 8 percent, according to Autodata.

    North American wholesale deliveries dipped 1 percent to 665,000 vehicles in July-September. But regional operating profit rose 12 percent to 58.9 billion yen ($518.1 million).

    In Europe, wholesale volume increased 4.8 percent to 240,000 vehicles in the quarter. European regional operating profit more than doubled to 38.7 billion yen ($340.4 million).

    Brighter outlook

    Citing the improved sales footing and a forecast for more cooperative in foreign exchange rates, Toyota lifted its earnings outlooks for the current fiscal year ending March 31, 2019.

    Toyota now expects operating profit to essentially break even from last year. It had earlier predicted a 4.2 percent decline in full-year operating profit. In net income, Toyota now sees a 7.8 percent decline, a less severe decrease than the 15 percent drop it had originally forecast.

    Naoto Okamura contributed to this report.

    Related Articles
    Toyota's chopping block: The prime candidates
    Toyota's chopping block: The prime candidates
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Digital Edition
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Thumbnail
    Read the issue
    See our archive
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Now

    Get access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that's vital to your business.

    Subscribe
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our Mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    Copyright © 1996-2019. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Leading Woman Network
        • PACE Awards
        • CES
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Fiat Chrysler
          • Alfa Romeo
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Maserati
          • Ram
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
          • Holden
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • Mitsubishi
        • Nissan
          • Infiniti
        • PSA
          • Citroen
          • Opel
          • Peugeot
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Auto Shows
          • Detroit Auto Show
          • New York Auto Show
          • Los Angeles Auto Show
          • Chicago Auto Show
          • Geneva Auto Show
          • Paris Auto Show
          • Frankfurt Auto Show
          • Toronto Auto Show
          • Tokyo Auto Show
          • Shanghai Auto Show
          • Beijing Auto Show
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • World Congress
        • Retail Forum: NADA
        • Canada Congress
        • Marketing 360: L.A.
        • Europe Congress
        • Fixed Ops Journal Forum
        • Retail Forum: Chicago
        • Leading Women Conference Detroit
      • Awards
        • 100 Leading Woman
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealership To Work For
        • PACE Awards
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • +MORE
      • Webinars
      • Leading Women Network
      • Custom Features
        • Ally: Do It Right
        • Guide To Economic Development
      • Classifieds
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit