Toyota Reduces Its Operating Loss in Europe

Toyota Motor Europe managed to drastically lower its operating loss through aggressive cost cutting despite a sharp sales decline in the fiscal year ending in March, according to the Automotive News Europe.

Toyota’s operating loss in Europe shrank to 33 billion yen ($357 million), from a loss of 143.3 billion yen in its 2009 fiscal year. During that same period, the European division of Toyota sold 858,000 vehicles, a decline of 19.2 percent from the 1.06 million units sold in its previous fiscal year.

Toyota's Europe sales took a strong hit following its late January announcement that it would recall more than 1.7 million cars on the continent, including its top-selling Auris, Avensis, Aygo, Yaris and Prius model lines. Europe was the region where Toyota lost the most sales, 204,000, in its last fiscal year. North America was second with a volume drop of 114,000 units.

Before the crisis, Toyota Europe was recording consistent profits. The company reported 141.5 billion yen operating profit in its 2008 fiscal year. A Toyota Europe spokeswoman declined to predict whether the unit would break even financially in the year ending in March 2011. The company does not offer financial forecasts by region.

For the current fiscal year the company forecast flat sales (860,000 units) in Europe including Russia, Ukraine and Turkey. In Japan Toyota recorded a sales increase by 218,000 units, while operating income dropped to 225.2 billion yen ($2.4 billion). In the U.S., operating income increased to 85.4 billion yen ($922 million) thanks to the interest-rate swaps and improved market conditions.

For the year to come, Toyota says it will sell 7.29 million units, up 53,000 units from last fiscal year, mostly thanks to the recovery on the foreign markets.
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