Arthur J. Villasanta – Fourth Estate Contributor
Tokyo, Japan (4E) – Toyota North America is seriously considering revamping its vehicle line-up in the United States to include more light trucks and fewer passenger cars.
CEO Jim Lentz said his company is re-examining its vehicle inventory and might ditch some models in a market increasingly dominated by light trucks, or vehicles with a gross vehicle weight up to 3,860 kg and a payload capacity up to 1,815 kg.
Lentz, however, claims Toyota won’t totally abandon passenger cars. But it is looking to add other vehicle types such as convertibles and coupes.
North American wholesale deliveries slid one percent to 665,000 vehicles from July to September. On the other hand, regional operating profit rose 12 percent to $518.1 million.
“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,” said Lentz,
Toyota North America has also refined its incentive strategy, making it more tailor-fit to its dealers. Lentz said Toyota brand’s average U.S. outlays are down $145 per vehicle this year and are about $1,200 below the industry average. 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,” said Lentz. “Most importantly today is incentivizing vehicles that are much more profitable.”
He made these statements after the parent Japanese firm reported on its operating results for the fiscal second quarter.
Toyota Motor Corporation, Japan’s biggest automaker said operating profit rose to $5.09 billion in the automaker’s fiscal second quarter ended Sept. 30. Net income grew 28 percent to $5.15 billion while revenue improved 2.3 percent to $64.3 billion.
Global retail sales increased 1.9 percent to 2.68 million vehicles in the July to September quarter. This total included sales of Toyota’s Daihatsu small-car subsidiary and Hino, its truck-making affiliate. Worldwide wholesale volume crept upwards 0.4 percent to 2.18 million vehicles.
Toyota Senior Managing Director Masayoshi Shirayanagi partly attributed the quarter’s upbeat results to a richer mix of more profitable models. Toyota is focusing on the booming global demand for crossovers, SUVs and other light trucks.
Toyota now expects operating profit to break even in 2018. It earlier predicted a 4.2 percent decline in full-year operating profit. Toyota now sees a 7.8 percent decline in net income, a less severe decrease than the 15 percent drop it originally forecast.
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