Proving financial slumps really do put a spanner in the workings of even the greatest, best-prepared talents, Toyota's today announced net revenues for the year to March fell by 21.9 per cent, versus last year. All the figures are here in this morning's press release.
Toyota sold 7.57 million vehicles in the fiscal year 2009 (to March 31st). That's 1.34 million less than in the year before - about a 15 per cent fall.
The company's accelerating its "profit improvement activities" by expanding its hybrid line-up. The new Prius is ready this month (handy) and there's a Lexus HS250h this summer too. The firm will launch four hybrids in Japan and three overseas within the year.
The results statement emphasises a plan to "thoroughly analyze our customers needs in each region". It also stresses product development focused on "hybrid and compact vehicles with more cost reduction efforts". We've been driving Honda's new Insight - aka Prius competitor - last week and it's designed to be cheaper than the Prius (see our verdict here). So this is no surprise.
Toyota's also emphasising "resource-rich and developing countries", a reminder that the growth and big car sales opportunities remain in markets where people expect their lives to improve in the near term - obvious perhaps, but it really can't be understated just how miserable most richer country markets are right now. Selling cars to depressed markets involves selling cars to depressed people. It's not fun and not easy.
"Selling cars to depressed markets involves selling cars to depressed people. It's not fun and not easy."
The statement goes on to say that "In addition, we will continue to accelerate commercialization of next-generation technologies in the areas of environment, energy and safety including hybrids, plug-in hybrids, next-generation batteries, bio fuels and fuel cell vehicles. We also aim to establish flexible and effective systems in the areas of development, production and sales to respond to changes in business environment."
While the rest is predictable, the last point intrigues me - "establish flexible and effective systems in the areas of development, production and sales to respond to changes in business environment".
This is something we've talked about before - firms like Toyota today can only have a profitable direct relationship with people who walk into showrooms and sign up to 'own' their cars. That narrows the firm's market substantially. Young people especially often don't crave a car as their primary, full-time 'social vehicle' now. They can get an iPhone a lot cheaper and interact far more using it than they can using a car. Toyota's Scion brand wasn't the answer here - the only way to tackle this is by getting really critical about the dealer-sales-based model that overwhelms (and shackles) today's 'development, production and sales' system. The brutal reality is that today's market is changing faster than even Toyota can.
Mark Charmer is founder of The Movement Design Bureau, a think tank. Photo by Mark Charmer, Bermondsey, 8 May 2009.
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