Toyota Kirloskar Motor, the Indian subsidiary of Japan’s largest carmaker, posted a profit of Rs 965 crore in FY18. Not only it is highest ever by Toyota, but the company has managed to post a profit of more than Rs 500 Crore for the fourth year straight in a row.
For the company, profit after tax rose to 73%, which was possible due to increased localization and cost-cutting and favourable currency movement. Despite a drop in annual sales by 2%, Toyota managed to increase its profit numbers.
According to a report, The company also witnessed a drop in revenue by 10%, decreasing the gross sale numbers to Rs 18,998 crore. A greater chunk of their profit numbers is responsible due to Innova and Fortuner sales.
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Both Innova and Fortuner are high in demand in their respective segments. Even though they both are priced a little more expensive than the competition, both these cars sell like hot cakes due to the level of the loyal customer base that these cars have built over the years.
The profit rise in India has been possible due to efforts initiated by the former managing director Naomi Isshi, who accelerated cost cutout in manufacturing, selling, sourcing, and marketing sectors. These optimizations in different stages enabled the company to post this type of profit even at 50% capacity utilization.
The overall ranking of the company in the fiscal year 2018 also slumped to 6th position from the fifth position in the fiscal year 2013. The market share of the company also experienced a fall to 4.28% from 6.2% in the Indian market.
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Toyota Kirloskar’s sales numbers in the fiscal year 2018 also took a hit and dropped to 140,000 from 165,000. The above-mentioned numbers suggest the company’s focus on profit rather than numbers.
The sustainable demand for Toyota’s Fortuner and Innova, along with demand for its new Yaris sedan in the Indian market has resulted in this level of growth for the company. The company has managed to grow about two times faster than the market at 15% churning out 92,169 units.
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