What’s better than one bestseller? Well, two of course. Demand for new Innova Crysta and Fortuner contributed to Toyota Kirloskar Motor’s Rs 965 crore profit in the year ended March 2018. It is the highest posted by the company to date in India.
Profit after tax rose 73 percent owing to increased localisation, cost cutting measures, and favourable currency movement. Toyota remains largely profitable despite a 2 percent dip in sales volume, having sold 140,000 units in the FY ending March ’18. This means that their highest profit was reported in a fiscal year in which they posted decline in sales.
Revenue was down 10 percent, and gross sales at Rs 18,998 crore. Fleet vehicles, Innova and Etios models contributed considerably to sales volume. Measures initiated by former MD, Naomi Ishhi have borne fruit as cost-reduction in sourcing, manufacturing, selling and marketing, and other parameters have helped return profits despite only 50 percent capacity utilisation.
This is the 4th consecutive year that Toyota posted profits in excess of Rs 500 crore even though sales volumes have not increased. For FY18, Toyota’s rank is down to six, and market share has declined to 4.28 percent from 6.2 percent. For the period, the auto market has ballooned to 3.4 million units.
For the year, Toyota Kirloskar’s sales were down to 140,000 units from 165,000 units. Despite a dip in sales volumes, the company has been able to focus on profit. Earlier this year in April, the company introduced Yaris. The sedan helps Toyota enter a market segment where the company wasn’t present. The Toyota Etios sedan was the company’s last all new car introduced in India in 2010, followed with the Liva hatchback.
Steady demand for Innova and Fortuner, and added numbers from Yaris, though limited has in all seen Toyota grow by about 15 percent to 92,169 units through the first seven months of the current FY.