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Old 21st October 2021, 08:03   #1
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Default Toyota Kirloskar Motor posts first loss in 5 years

2021:

Toyota posts first loss in 5 years on slow sales.

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Toyota Kirloskar posted a net loss of ₹55 crore for the year ended March 31, compared with a net profit of ₹187 crore the year before.
Quote:
The fall in sales, elevated fixed cost and lower margin on the products sourced from Maruti Suzuki weighed on the operating margin, which shrank to 1.97% from an average of 7.13% for the previous four years. Operating profit per car dropped to ₹27,832, which was 25% less compared with that of local market leader Maruti Suzuki.
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At its peak, Toyota Kirloskar's profit per vehicle was ₹1.39 lakh, in FY17. That was nearly double that of Maruti Suzuki at the time.

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Old 21st October 2021, 12:11   #2
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Default Toyota Kirloskar Motor posts first loss in 5 years

Toyota Kirloskar Motor has posted its first loss in 5 years.

According to the company's filing with the Ministry of Corporate Affairs, it registered a loss of Rs. 55 crore for the year ended on March 31, 2021. In the previous year, Toyota had posted a net profit of Rs. 187 crore. Total revenue is said to have dropped 16% to Rs. 13,181 crore.

Toyota Kirloskar Motor posts first loss in 5 years-frontleftside47.jpg

In FY2017, Toyota hit the peak profit per vehicle, which was nearly double that of Maruti Suzuki. Over the last 4 years, the company's operating margin has dropped from 7.13% to 1.97%. Operating profit per car dropped to Rs. 27,832 crore (25% less than Maruti Suzuki).

Toyota's realization per vehicle of Rs. 14.15 lakh in FY2021 was three times that of Maruti Suzuki and double of Hyundai. In the last fiscal, the company revenue was around 8-10% of the total passenger vehicle industry revenue. However, Toyota's market share has taken a hit and fell to about 3% in FY2020.

Source: ET Auto

Link to Team-BHP News

Last edited by TusharK : 21st October 2021 at 12:22.
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Old 21st October 2021, 12:39   #3
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

Of course, there are reasons like lock downs, union strike, chip shortage etc. But still surprising, that they reported a loss, despite selling hyper priced non-badge engineered offerings.

I guess the value of Innova has now reached it's peak. People are strongly considering other desirable alternatives like Safari, Hector+, XUV etc. or going in for the much cheaper XL6/Ertiga.
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Old 21st October 2021, 12:40   #4
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

Well deserved.
I am expecting the Bosses at TKM to rush to the MSIL Headquarters now.
And demand a few more rebadged vehicles.

The Celerio perhaps, (renamed to Toylerio) or even the Alto (renamed to Talto).

Along with this, we can also expect a goofed up press release, where they will lament over Indian Tax structure, and later retract the same.
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Old 21st October 2021, 12:43   #5
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

Another Ford in the offing?

I feel the cross-badging partnership with Suzuki didn't work either, in India. Any info on those figures. Toyota continues to be weak in sub 10L segment.
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Old 21st October 2021, 13:00   #6
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

I was thinking that Toyota is making huge profits after selling Innova for 30 lakhs and Fortuner for almost 50 lakhs. Looks like itís not the case. Is the loss due to reduction in a sales number due to chip shortage ?
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Old 21st October 2021, 13:25   #7
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

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Originally Posted by anb View Post
I was thinking that Toyota is making huge profits after selling Innova for 30 lakhs and Fortuner for almost 50 lakhs. Looks like itís not the case. Is the loss due to reduction in a sales number due to chip shortage ?
Pretty much everyone is struggling mate!
- Honda Cars India is in losses since last 2 years.
- Renault Nissan is making losses.
- Skoda - VW is meagre profits.
- MG is still to breakeven
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Old 21st October 2021, 14:00   #8
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

IIRC, earlier the operating profit per car for Toyota was pretty healthy compared to other manufacturers in the country. But since the company is now selling rebadged vehicles in the volume category (higher volumes and comparatively thinner margins) I think Toyota will never achieve the operating profit per car figures that it used to achieve earlier. Will be interesting to keep an eye on this aspect.

IMHO Toyota India, with its overconfident, risk-averse and slightly high handed approach at times, is past it's peak in our country now. Will be interesting to see how the management of the company reacts to this.
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Old 21st October 2021, 15:01   #9
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

Folks who've booked the Fortuner and Innova, brace yourself for another round of price hike

There could be combination of factors that led to this loss - pandemic and resultant downcast economy, chip shortage, higher production cost etc. The cross badged Maruti vehicles is very likely to have a thinner margin too. Hence the Glanza, Urban Cruiser numbers don't count for much, which is almost a third of their sales volumes.

Last edited by Bibendum90949 : 21st October 2021 at 15:12.
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Old 21st October 2021, 15:14   #10
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

Except Tata Motors and Mahindra, no other manufacturers in India have courage to experiment and bring truly new product. It is writing on wall for them if they do not change their strategy. Toyota is mother of all other car manufacturer is failed to produce a single car which can be mass appealing and well affordable. If KIA can establish themselves with Seltos and Sonet what stopped Toyota to bring equivalent car under 15 Lakhs. More power and success to TATA, it is good for India and their shareholders include me.
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Old 21st October 2021, 15:20   #11
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

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Originally Posted by abhishek46 View Post
Well deserved.
I am expecting the Bosses at TKM to rush to the MSIL Headquarters now.
And demand a few more rebadged vehicles.

The Celerio perhaps, (renamed to Toylerio) or even the Alto (renamed to Talto).

Along with this, we can also expect a goofed up press release, where they will lament over Indian Tax structure, and later retract the same.
+1

The reason why Toyota is not doing well has nothing to do with the Indian car buyer, but how Toyota treats the Indian market themselves.

Walk into their showroom, and there's nothing that is priced right (except for the Maruti Suzuki cars they're pushing).
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Old 21st October 2021, 15:38   #12
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

It looks like now Toyota wants to follow Ford.

Over priced cars, no new launches (except for a few rebadged ones).They reaped the benefits of the Qualis and Innova. Steadily increased the prices, now other manufacturers have more value options.

Once Tata and Mahindra increase their service and quality standards, I don't think Toyota will stand a chance.

Covid & Chip Shortage could be one possible reason but I personally think Toyota won't last long in the Indian market unless they do something really innovative.

Last edited by J4J : 21st October 2021 at 15:53.
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Old 21st October 2021, 17:24   #13
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

Its really strange that even after selling their vehicles at more than twice the price (as compared to the rest of the world barring a few countries), Toyota is still at loss. How automobile manufacturers amass losses is beyond my understanding, specially when every single rupee increase in production and tax is totally passed on to the customers.
The way the prices are discounted, by the premium segment makes me wonder how big is the profit margin in the automobile sector.
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Old 21st October 2021, 18:00   #14
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

I have only one word for this - Good!

For far too long have Toyota sat on their bottoms, charging obscene amounts of money and taking Indian consumers for a ride. It is not as if they did not have options. The sheer number of vehicles they could have introduced here is mind-boggling.

The same, to differing degrees, also applies to the other Japanese companies here - Honda and Suzuki.

It is a consumer's market, and the mantra is very simple. Innovate, or perish.
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Old 21st October 2021, 18:04   #15
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Default Re: Toyota Kirloskar Motor posts first loss in 5 years

Automotive industry losses are pretty big across the board, one should really worry about Honda though rather than Toyota. Honda does not seem to have a tie up with Maruti to keep their showrooms occupied either.
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