Toyota posts third consecutive Q1 record
Toyota announced its Q1 2016 financial results today, posting record first-quarter profit for the third consecutive year despite a decline in global sales.
Toyota’s Q1 operating income increased to 756.0 billion yen ($6.25 billion), up 9.1%, and net income jumped 10% to 646.3 billion yen ($5.34 billion).
Toyota surrendered the global sales crown to Volkswagen in Q1, having reported global deliveries of 5.02 million units (a 1.5% drop compared to a year ago), falling just short of the 5.04 million deliveries reported by Volkswagen earlier in July.
We now have a better idea of where Toyota fell short. Like Volkswagen, Toyota struggled in South America, Asia and parts of Europe. While European sales were mostly flat, Asia-market deliveries have dropped as much as 15%. China in particular is causing headaches for everybody as a market crash threatens both sales volumes and profitability and entrenched automakers have begun a race to the bottom on pricing to maintain dealer traffic.
As you may expect, Toyota is not alone. Volkswagen’s total global deliveries were also down compared to last year, but only by 0.5%, making the race for first place a struggle between two behemoths who are both working hard to mitigate declines in volume.
Volkswagen’s largest decline in volume also took place in Asia, where struggling sales in China cost the automaker roughly 70,000 sales on a 3.9% drop in units sold. VW’s biggest declines on a percentage basis were reported in Brazil (-29.6%) and Russia (-40.9%)–countries where the auto industry as a whole has struggled due to weak economies.
Curious as to how Toyota did compared to the other big automakers? Check out last week’s digest of recent earnings announcements from around the industry.