Tuesday, August 07, 2007

Toyota: More Profit Per Car

I always knew that Americans are best in making profit as they only care for profit as a capitalist economy. Well, it seems that Japanese auto makers are defeating American auto makers in their own game. We have often heard that Asian countries are good at making cheap products. Naturally, when you make cheap products you can make less profit. However, in the car industry, we can see an opposite picture now. Toyota is making more profit on an average. On the other hand, American companies like GM and Ford are not making so much profit like Toyota.

IHT reported:

Still, GM made $2,123 (€1,539) less per vehicle than Toyota in 2006, according to the report. Toyota, the most profitable of all automakers on a per-vehicle basis, increased its profit per vehicle from $1,175 (€852) in 2005 to $1,977 (€1,433) in 2006, the report said. The numbers for individual manufacturers are at times lower than the overall gap because they do not include special write-offs, Harbour-Felax said.

Ford, while it has made progress on cost cuts, common parts and globalization, still had a $3,939 (€2,855) profit gap in 2006 when compared with Toyota, Harbour-Felax said.

Chrysler's profit gap with Toyota averaged $3,088 (€2,239) per vehicle for 2006 mainly because it was "force feeding" the market by selling vehicles with heavy incentives, she said.

Really, bad news for American auto makers. Toyota is riding fast indeed.