Toyota, the giant that refuses to grow

"No."

“No.”

The fact that Toyota’s net profits for the past fiscal nearly doubled to a record $17.73 billion failed to surprise the throngs of media that had congregated this afternoon at the company’s HQ in Tokyo. After all, all previous quarters of the past year had been strong, and nobody expected the company to slack off in the final three months. What surprised some was the company’s ostensive aversion to growth. Akio Toyoda and his lieutenants predicted more or less flat sales and likewise horizontal earnings for the current year. Which leaves the race for World’s Largest Automaker wide open. Any of the three contenders, GM, Volkswagen, and Toyota can come out on top by the end of the year.

“Sustainable growth” was the operative word today. Later in the session, it morphed into “a lull in growth,” after a reporter chose to use the less hackneyed version. For the current fiscal, Toyota predicts sales of 10.25 million, up just a tad from last year’s 10.13 million. Its operating income is projected to tread water at around the $22.6 billion level. CAPEX will be flat.

As in the past quarters, Toyota reiterated its antipathy to building new plants. Whereas its competitors race to put new factories into the dusty Chinese landscape and elsewhere, Toyota wants to create all that sustainable growth by raising factory efficiencies only. Toyota either has developed some miracle engineering that cranks up cars faster, or they are worried that the economy ahead is not as rosy as some hope. Again and again, Akio Toyoda said that the company does not want to be caught by disasters in the middle of a building boom, as it was in 2008. He even was “happy” that his company finally can pay taxes in Japan.

Volkswagen’s chances to fulfill its plan to become world’s largest before 2018 just rose a whole lot.