From major losses to significant profit
Toyota Motor Corp. recently announced their financial results for the fiscal year ending March 31, 2010. While it might seem natural for a year ending at the same time March also exits to come in like a lion and go out like a lamb, it can be said rather certainly that in these twelve months the opposite was true. Much of the truly leonine happenings occurred toward the end of the year, after the New Year. You might recall something about sticking brake pedals and “sudden unintended acceleration”? These issues were serious enough to force Toyota into recalling over 6 million vehicles, and it earned TMC a fine of $16 million dollars, the largest allowed under current U.S. law (the previous largest was $1 million against GM in 2004). However…
Instead of retreating or folding amid the turmoil and controversy, Toyota and its employees worked diligently to fix the problem. It’s service centers, like the one at the Gurnee dealership in Illinois, were staffed extra long hours to accommodate troubled customers, and Toyota offered some serious incentives to win back the consumer loyalty they had lost (in one prominent brand loyalty survey it was shown Hyundai had replaced Toyota for #1). They offered zero percent financing and subsidized leases on many of their popular models (sales of used cars in Gurnee turned into new car sales), and all customers could have up to two years free maintenance.
Through these incentives and a very strong end to the year after what you can imagine were some quiet months, it all added up to a year that was not as bad as it could have been, and was in some ways quite good business-wise. Some of the highlights include TMC’s net revenues which were nearly 19 trillion yen, a decrease of 7.7% compared to the year before. Net income increased to 209.4 billion yen, and the operating income for TMC increased by 608.5 billion yen. In North America, vehicle sales units, which were 2.1 million, saw a modest decrease of $114,000 from the previous year. The press release with complete figures can be found at http://pressroom.toyota.com/pr/tms/toyota-announces-year-end-financial-158402.aspx.
So all in all, for Toyota rolling off the lots were still both new and used cars. Gurnee, Illinois, weathered the storm, as did dealerships around the country and around the world. In fact, the Gurnee dealership would be the first to say that this lapse in judgment has made the Toyota community stronger, in a sense. It’s a shame what they had to go through to get there, but all through life stuff happens and what matters is how you deal with it.
