BRUSSELS – Toyota Europe's boss reconfirmed that the company's automaking operations will make money for the first time in five years.
"Despite a difficult market, we are on track to return our automotive operations to a profit in the current fiscal year," Toyota Europe CEO Didier Leroy told Automotive News Europe.
Leroy first made the profitability prediction early this year, before economic conditions in Europe worsened. Europe is Toyota's fourth-largest market, after North America, Asia (excluding Japan) and Japan.
The company credits a deep restructuring that started in mid-2010 with the financial turnaround of its European business. The cuts have made it possible for Toyota Europe to turn a profit at a volume of a little more than 800,000 vehicles, which is what the company expects to sell in Europe in its fiscal year ending in March 2013.
In the past, Toyota Europe sold more cars, but its automaking business remained in the red. The company's automotive unit last made a profit in 2007 when it sold a record of almost 1.3 million vehicles in its 56-country European region. But the auto division has been losing money since then.
For years, Toyota has counted on the success of its financial services unit to help the company report a combined consolidated profit in Europe. Leroy, a 55-year-old French manufacturing expert who joined Toyota in 1998, is expected to make all parts of the business successful, and he sees positive signs that will happen.
In its first half ended Sept. 30, Toyota Europe's vehicle sales were up 14.1 percent to 412,000 units and operating profit for the consolidated business rose to 12 billion yen (114 million euros) from a 1.9 billion yen loss in the same period the year before.