Toyota just handed over a pretty good financial report.
From April to June this year (the first quarter of Toyota’s fiscal year 2025), Toyota’s global revenue rose 12.
2% year-on-year, to about $73.
6 billion, and operating profit rose 17% year-on-year, according to Toyota’s latest financial results on Aug. 1. it’s about $8.
15 billion.
Revenue and operating profit reached record highs for the same period.
However, it should be pointed out that behind this beautiful financial statement, favorable changes in the foreign exchange rate are the main reason (the exchange rate of the Japanese yen against the US dollar fell to its lowest level since 1990 last quarter.
It has not only enhanced the market competitiveness of Japanese exports, but also increased the value of dollar-denominated sales sent back to headquarters in Japan).
If you look at the production and sales data, Toyota’s performance is actually going backwards, and Toyota’s overall sales fell 4.
2% in the second quarter.
Among them, the fluctuation of sales in the Chinese car market is one of the key reasons for the decline in Toyota’s global sales, which fell 18% in the second quarter compared with the same period a year earlier.
Lengthen the timeline, the situation is even worse.
Sales data compiled by the Geshi Automotive Research Institute show that throughout the first half of the year, cumulative sales of Toyota’s two major joint ventures in China, Guangzhou Auto Toyota and FAW Toyota (hereinafter collectively referred to as North-South Toyota), fell 20.
6% from a year earlier.
Among them, Guangzhou Auto Toyota fell 25.
8% year on year, FAW Toyota fell 14% year on year.
North and South Toyota also began to live a hard life, “can we increase the price by 100000?” I’m sorry, we don’t have such a big discount.
This is a joke that once spread widely in the domestic market, teasing the situation of Toyota Elfa in the domestic market.
Furthermore, this mockery reflects the strength of Toyota in the domestic market at that time, as well as the helplessness of Chinese consumers against the phenomenon of price increases by Toyota dealers.
Toyota is not the only foreign brand that has sold cars with price increases in the domestic market, but it is also a representative brand in the field of price increases.
On the one hand, the price increases of some of Toyota’s products are strong.
Elfa is such a model that the guiding price in the domestic market is far higher than that in the overseas market, and the terminal sales link can increase the price by hundreds of thousands, which can be regarded as an out-and-out phenomenal product in the domestic market.
An ordinary luxury MPV is rigidly sold into a luxury.
On the other hand, Toyota has a price increase behavior of many models, in addition to Elfa, Prado, Hanlanda, Sena, Camry and other models, also have the phenomenon of price increase sales.
I believe everyone has heard of the fierce competition in the domestic car market in recent years.
Under this background, Toyota dealers can still increase prices and sell cars so strongly.
The reason is very simple.
North and South Toyota really had no shortage of customers before.
Once Toyota Motor, it can be said that the brand effect is strong, the product competitiveness is high, and the supply of hot models falls short of demand at the initial stage of listing, which is quite common.
In a word, it is too smooth for Toyota to develop in China.
Sales data compiled by the Global Automotive Research Institute show that the overall market performance of North and South Toyota showed a continuous upward trend before 2023, and GAC Toyota also surrendered a record annual sales of more than 1 million vehicles in 2022.
However, after entering 2023, the market performance of North and South Toyota showed a downward trend, and the annual sales of the two joint ventures began to decline.
By 2024, the market performance of the first seven months shows that the weak market situation of North and South Toyota has not alleviated.
GAC Toyota sold 421289 vehicles from January to July, down 15.
9 per cent from a year earlier, while FAW Toyota sold 374495 vehicles in the first seven months of this year, down 4.
5 per cent from the same period last year.
Compared with the current decline in sales of many joint venture car companies, the decline in sales of North and South Toyota does not seem to be particularly exaggerated.
However, if combined with the reality of the collapse of the North-South Toyota terminal price system, the current “days” of North-South Toyota can also be called difficult.
Toyota, which has always been famous for its firm prices in the past, has also opened the “gate” of terminal profits in the domestic market, and the discount of 30,000 to 50,000 for main models has become a common phenomenon.
Even so, Toyota’s size in the domestic market continues to shrink.
In the first half of this year, among the models owned by North and South Toyota, only a few SUV models such as RAV4, Feng Landa, Carola Ruifang and Crown Lu Fang were able to maintain positive growth.
From the perspective of various market segments, in the first half of the year, North and South Toyota was able to maintain an overall rising market situation only in the compact SUV market, while other levels of market segments showed varying degrees of decline in sales.
Among them, the A0 class car and the A0 class SUV market decline is the most exaggerated, the overall decline is more than 80%.
The A-class car market and the B-class car market also fell sharply.
Carola and Leiling, as well as Camry and Asian Dragon, were previously Toyota’s main models in the domestic market, and in the first half of this year, the year-on-year sales of all four models fell by more than 40%.
The sales performance of the main models of North and South Toyota in the first half of the year, photo source: Geshi Automotive Research Institute, price reduction has lost its share, this is the real big crisis.
In the Chinese market, Toyota’s so-called brand power advantage no longer exists.
Oh, why is that? What was handed over two years ago was still a historical peak performance.
Toyota was a leader in the domestic market in terms of user reputation and product value preservation rate, but after a short period of two years or so, the market was completely reversed.
Large terminal profits have been unable to cover up the obvious market decline, and Hanlanda, a previously absolute market “sought-after goods”, have begun to decline.
The price threshold fell from a peak of nearly 300000 to a range of 220000 (including official APP rights).
The pressure that Toyota faces in the domestic market is evident.
What is the cause of it? In fact, it is very simple, in the Chinese car market to fully embrace the new stage of electrification, Toyota’s domestic development, obviously failed to keep up with the pace.
In the Chinese automobile market in 2020, although the market scale of electric vehicles is still in the cultivation stage, the mainstream wind direction of the electric industry has basically taken shape.
At that time, Toyota was not optimistic about electric cars.
“if the auto industry moves too hastily to electric cars, then the current business model of the auto industry will collapse.
” This is Toyota President Akio Toyoda.
Male, issued a warning in 2020.
By 2022, even though Toyota had unveiled its own new energy strategy (it plans to invest $35 billion in electric cars by 2030 and launch 30 pure electric models by 2030), Akio Toyoda still expressed concern about the prospect of electrification in an interview.
“most people in the auto industry are the silent majority, and they want to know if electric cars are really feasible as a single option.
But they dare not speak out this doubt, because electric cars are considered to be the trend of the times.
” At a time when the spring tide of electrification began to overwhelm all levels of market segments in China, Toyota was in a hurry.
Toyota’s electric products have been put on the market one after another, but the real market dividend period is over.
Both North and South Toyota launched the electric car bZ4X in 2022, FAW Toyota launched the electric car bZ3 in 2023, and Guangzhou Automobile Toyota launched the new energy brand “Platinum Intelligence” during the Guangzhou Auto Show in 2023.
The new bZ4X became the first model of the brand, announcing the Chinese name Platinum 4X.
However, judging from the follow-up market performance, Toyota’s previous pure electric offensive in the domestic market has been a phased failure, and several electric models are still lukewarm even if their prices have been reduced.
According to the Global Automotive Research Institute, the lagging pace of electrification transformation is the primary factor restricting the development of North-South Toyota.
In the field of new energy, Toyota not only laid out late, but also the product line is not perfect, resulting in its weak competitiveness in this field.
Gas-electric hybrid and hydrogen energy have long been regarded by Toyota as the highlight of the new energy strategy, pure electricity and plug-in market boom, north and south Toyota did not seize.
According to data compiled by the Gaishi Automotive Research Institute, in the first half of this year, GAC Toyota accounted for less than 1% of new energy vehicle sales, while FAW Toyota did slightly better, accounting for 7.
8% of new energy vehicle sales, but it is still far lower than the new energy penetration rate of 39.
2% in the overall car market.
The high permeability of new energy vehicles in the auto market as a whole is mainly contributed by independent car companies.
In the past two years, the sudden rise of independent new energy brands has greatly reduced the living space of joint venture family vehicles, and posed a direct threat to the traditional advantage market of North and South Toyota.
The Global Automotive Research Institute pointed out that China’s new energy vehicle brands, with their early product layout and perfect product line, can not only continue to launch cost-effective new energy models, but also more accurately capture the real needs of end consumers, gradually eroding the market share of joint venture brands, including North and South Toyota.
Coupled with the current beacon price war, North and South Toyota is under unprecedented market pressure.
In recent years, with the maturity and opening of the domestic automobile market, independent car companies represented by BYD, with flexible strategies and high performance-to-price advantages, have provoked price competition one after another, and the joint venture car enterprises represented by Toyota have to respond passively.
Profit margins are constantly squeezed at the same time, sales performance is also inevitably affected.
The process of electrification lags behind, and the product structure needs to be further optimized.
North and South Toyota has obviously realized the problem and started the process of reshaping its brand image one after another, which publicizes its own technology accumulation in electrification and intellectualization.
naturally, it’s the most important.
Take GAC Toyota as an example, while continuing to promote electric-hybrid dual-engine models, it has also begun to make “great efforts” in intelligent experience, working with Huawei and Tencent to create intelligent cockpits, together with domestic “unicorn” companies in the field of smart driving, such as Momenta and pony Zhixing, to hone their intelligent driving skills.
Can you take the lead in the industry for the time being, or at least put a correct attitude and begin to cooperate with leading Chinese enterprises in related fields? , photo source: GAC Toyota, in terms of electrification, Toyota’s all-solid-state battery plan is advancing in an orderly manner.
Performance-based lithium-ion batteries and universal lithium iron phosphate batteries are also a new generation of power batteries built by Toyota for the future.
In addition, with the BEV platform as a starting point, Toyota is also developing special engines on the PHEV and HEV, which can adapt to a greater variety of fuels, while bringing a better miniaturization experience and higher efficiency.
Having experienced the good days of being sought after and the hard days of gradually going to a low ebb, it is now a critical moment for Toyota to adjust its development strategy in China.
At this stage, the timing of adjustment is a little late, but the ability to act proves that Toyota still attaches importance to the Chinese market.
There will certainly be another “tuyere” in the market, such as mass production of solid-state batteries, and so on.
As long as Toyota seizes the opportunity, Toyota will have a chance to make a comeback.
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