The huge impact of recession has affected global performance of auto industry, Toyota Motor Corp a reputed auto firm based in Aichi Japan is pondering about price hike in emerging Brazil and Indian markets, the issue here is weakening of local currency.
2014 Toyota Land Cruiser Prado
Toyota aims to raise costs in emerging nations, the strategy may sound practical, but a lot of thought process is involved. The company will have to ensure that increased rates do not have harsh impact on profits. The depreciation of currency value of emerging economies like Brazil and India has had a toll on the profit value of the Japan based firm. The revenue outputs are affected when the vehicles are manufactured at the local unit, and if these are exporter to developing nations the consequences are adverse. Not much of an impact is noted with Euro or dollar.
Toyota has expanded its product outlet to emerging markets and new nations; the power of recession is adverse with wide currency fluctuations. The undesirable consequences have had an effect on the profit outlook of Toyota Motor Corp. If the company has to analyse currency exchanges, there is a vast variation, and it will adversely affect operations by an enormous margin of 95 billion yen which is $934 million or Rs 5,593 crores in the current fiscal. The profit reduction rate is 0.3% and it is dismal taking into account the record breaking profits noted in earlier fiscal.
The sale output of Indian auto industry has been constrained; the trend has been visible for the past couple of years. The Indian subsidiary of Toyota, Toyota Kirloskar Motor has not been able to pull out profits in 2014 June. The firm noted a 2.97% decline with the movement of 13,394 vehicles. In the corresponding year the company rolled out 13,805 pieces. Amidst the reduced sale output, Toyota recorded decent domestic profits with 9% gains. The growth comes with the sale of 12,010 units significantly higher than 11,010 pieces rolled out in the corresponding year. The company managed to export impressive volumes of Etios by selling 1,384 pieces.
On the admirable sale outcome, Toyota Kirloskar Motor attributes much of the success to Etios Cross and new Corolla Altis. The booking output for Etios Cross is more than 3,000 and with new Corolla Altis it crosses over 5,400 pieces. Toyota is at the moment working towards reducing the waiting time for both vehicles.
From the sale figures it is evident that Toyota has not managed to export many units of its vehicles. The growth in domestic market has grown to a decent level, at a time when the markets have shown signs of revival first visible in 2014 May. Toyota has structured its launches effectively with the arrival of two amazing products in May Etios Cross and all new Altis. Both vehicles have something unique to offer, Etios Cross comes with plastic cladding, silver roof and bull bar. The new Corolla Altis comes with a more premium dressing and is nothing but a wow factor so much more than the past.
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