TOKYO -- No more useless conferences. Ditch the binders of paper. Scrutinize every vehicle specification. And most importantly, keep an “eye on what we do.”
That’s the zealous new cost-cutting mantra coming straight from Akio Toyoda, as Toyota Motor prepares for a new round of belt tightening -- even as it books record profit.
The president’s warning? Today’s good times won’t last if every corner of the company doesn’t help save money to build a war chest for investing in the future, he says.
His U.S. market is already feeling the heat.
The automaker reported last week that North America -- Toyota’s traditional cash cow -- booked a regional operating loss of 38.8 billion yen ($365.3 million) for the January-March period. That was down sharply from a loss of 70.7 billion yen ($665.6 million) the year before. But North American operating profit margin for the full fiscal year ending March 31 rang in at a meager 1.3 percent. Toyota wants to lift it to 8 percent by 2020, said Executive Vice President and CFO Koji Kobayashi.
The maker of Camry and Corolla sedans has been slow to react to the U.S. customer stampede from cars to light trucks. North American wholesale volume declined 2.5 percent to 675,000 vehicles in the most recent quarter, and Toyota is locked in incentive competition with rivals.
Chief Competitive Officer Didier Leroy and North America CEO Jim Lentz are working on a plan to shore up profits in the critical region.
“We are trying very hard to re-establish earnings power in North America,” Kobayashi said.