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Dave

Bigger profits for Toyota

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Toyota’s operating profit rose by a solid 43% in the last quarter, as quality gains cut warranty costs and cost-cutting moves took effect. 

The gain offset an unusual move by the company — making a wide range of safety gear standard from the Corolla on up. 

The company had net income of $4.53 billion from January to March 2018. While wholesale volume dropped by 1.8%, with 2.3 million vehicles sold, retail sales rose by 2.2%, to 2.6 million. That includes Daihatsu and Hino. The increase in income is more impressive when one considers the effects of unfavorable exchange rates with the US dollar. 

North America was good for sales, but bad for profits; Toyota lost $365 million in the quarter, narrowing their loss from $666 million in the same quarter of 2017. Within the United States, Toyota has been hurt somewhat by the shift of customers from compact and midsize cars (where Toyota dominates) to trucks and SUVs, where Toyota only dominates one category (with the RAV4). The company is still weighted towards cars, with were 40% of sales vs 32% in the full US market, but it is adapting by converting two of its three Ontario factories to crossovers. 

U.S. incentives are low for the industry but high for Toyota — at nearly $2,500 per vehicle in the quarter. The industry average is around $3,700. 

Toyota is investing heavily in electric cars and autonomous driving, and has an electric-powertrain joint venture with Mazda, Subaru, Suzuki, and its own Denso. 

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I'm really surprised they aren't making a profit in the US. You said before the RAV4 was the best selling car other than pickups but they don't make money ?

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