Toyota’s sales are going from bad to worse

A photo of a Toyota production line with The Morning Shift graphic along the bottom.

Photo: Toshifumi Kitamura / AFP (Getty Images)

Toyota is seeing its sales go from bad to worse As supply chain problems take hold, electric vehicle startup Lordstown Motors saw its first-ever profit, and Boeing workers at three US plants have agreed on a new contract. All this and more The morning shift for August 4, 2022.

1st gear: Toyota sales decline 42 percent

It’s a tough time to be a car manufacturer, as supply chain problemsthe lockdowns caused by the pandemic and the threat of a the recession lingers on us all. For Toyota, this triple assault has affected its sales. Hard.

After seeing a 30 percent drop in sales by volume in 2021, the automaker it has now experienced a 42% decline in profits for the first quarter of its last fiscal year. Clearly, things are not going well to substantially worse for the Japanese company. According to Reuters:

“Toyota Motor Corp’s profits plummeted 42% worse than expected in the first quarter as the Japanese automaker was squeezed between supply constraints and rising costs.

“Operating profit for the three months ended June 30 fell to 578.66 billion yen ($ 4.3 billion) from 997.4 billion yen in the same period a year ago, Toyota said Thursday, closing. a difficult period. It has repeatedly cut its monthly production targets due to the global shortage of chips and the COVID-19 curbs on plants in China. ”

The scale of its declining profits was “well beyond expectations”. Despite the introduction of new models to the market this quarter, such as the electric BZ4X, the increase in production costs and the shortage of components have had a big impact on the company’s sales.

Toyota has stated that the increase in material prices cost him 315 billion yen ($ 2.36 billion).

But the car manufacturer he does not think that these misfortunes will last forever. A Toyota spokesperson told Reuters that production will resume in the second half of the year. The company it also adhered to its full-year operating profit forecast and reaffirmed its ambitions to produce 9.7 million vehicles this financial year.

2nd gear: Lordstown Motors reports his first profit

But as Toyota was seeing a dramatic drop in revenue, an unlikely electric vehicle creator had recorded its first ever profit. Troubled startup Lordstown Motors made a profit in the first quarter of this year after selling assets, including its Ohio assembly line, to Taiwanese contract manufacturer Foxconn. Reuters relationships:

“The electric vehicle company posted gains of more than $ 100 million in the April-June quarter from the sale of Ohio assets, driven by the need for funding due to industry-wide supply chain disruptions and increased of material costs.

“This helped it post a net profit of $ 63.7 million, compared to a loss of $ 108.2 million a year earlier.”

EV the manufacturer says its all-electric Endurance pickup truck will perhaps go into production later this year. But earlier this year, the automaker he warned he was burning cash at an alarming rate.

In 2021, Lordstown Motors had a reserve of $ 587 million, with which he was developing and building the fully electric truck. But by March of this year, that figure had dropped to just $ 203.6 million. The sale of its Ohio facility to Foxconn it was thought to offer a short-term boost to the company as it approached the final hurdles to put its truck on the road.

3rd gear: Subaru is Okay, actually

Lordstown Motors wasn’t the only automaker with something positive to share this morning. Japanese company Subaru saw its profits rise 24% in the last quarter as tThe company “recovers lost production, increases sales and collects favorable exchange rates”, according to Automotive News.

The The site reports Subaru’s operating income reached ¥ 37 billion ($ 271.3 million) in the first fiscal quarter ended June 30. Subaru said this the increase was the result of increased sales since “it has gradually overtaken production crimped by the Covid-19 pandemic and the global shortage of semiconductors”. From Automotive News:

“Global production increased 12% to 205,000 vehicles in the April-June period, helping to drive a 12% increase in world sales to 196,000 vehicles. The rebound helped Subaru catch on after struggling to fill the product pipeline due to high demand for its products.

“The biggest boost to Subaru’s earnings, however, came from a boon from the dramatic weakening of the Japanese yen against foreign currencies, particularly the US dollar.”

As the company’s fortunes continue to rebound after the pandemic struggles, Subaru CFO Katsuyuki Mizuma has also dismissed recession talk in the United States. Mizuma said demand for Subaru vehicles “remains solid” in America and said the company was “racing to fill some 50,000 back orders” here.

Mizuma warned that limited production remains Subaru’s biggest obstacle.

4th gear: Toyota will buy Get your electric vehicle back

Earlier this year, Toyota did a great song and dance on his first EV, the BZ4X, produced in collaboration with Subaru. The electric SUV has proved quite popular and Toyota has so far delivered nearly 3,000 to customers in the United States, but its launch was hit with problems and now the company offers to buy back the vehicles affected by a recall.

After just two months of sale, Toyota has announced the recall of the BZ4X thanks to the defective wheels, which it was said could come off the car while driving. Not a great start for Toyota battery-powered future.

Now, according to Electrek, the company offers to buy back defective models as its appeal continues to falter. The site says:

“Toyota announced the recall of the bZ4X in late June, citing the possibility of the wheels of the new electric vehicle falling out. While it applied to all bZ4Xs produced, as it happened right after the car’s launch, it’s still a relatively small recall – just 2,700 vehicles.

“Owners are now receiving letters from the Toyota company detailing the details of what Toyota is offering in exchange for the issue of this recall and given the scale of the offer, the recall does not appear to be going strong.”

The letter, seen by Electrek, asks owners not to drive their electric vehicles as Toyota seeks a remedy for the problem.

While investigating a solution, Toyota will memorize the callbacks vehicles and offer cars on loan to interested customers. The car manufacturer it will also reimburse the fuel costs for the loaned car and also buy back the vehicle if you don’t like the sound of its solutions.

Electrek says the problem also affects Subaru’s Solterrabut deliveries of this model are not believed to have started in the United States yet.

5th gear: Boeing workers agree on the new To contract

A few weeks after threatening a strike, Boeing workers at three US factories canceled the union action and agreed on a new contract. More than 2,500 workers at the aerospace giant’s sites in the Midwest voted to ratify a contract that their union says will increase pay by “an average of 14 percent over three years and add inflation adjustments.”

The Associated Press reports that members of the International Association of Machinists and Aerospace Workers at Boeing facilities in St. Louis and St. Charles, Missouri, and Mascoutah, Illinois, agreed to the contract earlier this week. According to the site:

“The union said the new contract includes a provision in the rejected agreement that requires corporate contributions of up to 10% to employee 401 (k) retirement plans and added a lump sum payment of $ 8,000 that can be paid into the employee’s account. It also has improvements to sick leave and parental leave and makes no changes to workers’ health insurance plans, according to the union. ”

The sites in question focus on Boeing’s military operation. While the company struggled to fill the order books for its commercial jets in the midst of the ongoing pandemic, its defense and space business has been booming.

The AP reports that during the first six months of this year, this industry accounted for approximately 38% of Boeing’s total revenue.

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