Toyota sales go from bad to worse

A photo of a Toyota production line with The Morning Shift graphic at the bottom.

Photo: Toshifumi Kitamura/AFP (Getty Images)

Toyota sees sales go from bad to worse as supply chain issues take hold, EV startup Lordstown Motors has made its first-ever profit, and Boeing workers at three US factories agreed to a new contract. All this and more in The morning shift for August 4, 2022.

1st gear: decline in Toyota sales 42%

It’s a tough time to be a car manufacturer, that supply chain issuesthe lockdowns caused by the pandemic and the threat of a the recession lingers on all of us. For Toyota, this three-pronged assault has hit its sales. Hard.

After seeing a 30% drop in sales volume in 2021, the automaker has now announced a 42% drop in profits for the first quarter of its last fiscal year. Obviously things are not going so well substantially worse for the Japanese firm. According Reuters:

“Toyota Motor Corp’s profit fell 42%, worse than expected, in the first quarter as the Japanese automaker was caught between supply constraints and rising costs.

“Operating profit for the three months ended June 30 fell to 578.66 billion yen ($4.3 billion) from 997.4 billion yen in the same period a year ago, said Toyota on Thursday, capping a difficult period, repeatedly cut its monthly production targets due to global chip shortages and Covid-19 restrictions on factories in China.

The extent of its plummeting profits was “far beyond expectations”. Despite the release of new models this quarter, such as the electric BZ4X, rising production costs and parts shortages have had a significant impact on the company’s sales.

Toyota claimed that rising material prices cost it 315 billion yen ($2.36 billion).

But the automaker don’t think these ill fortunes will last forever. A Toyota spokesman told Reuters production would resume in the second half. The company also maintained its full-year operating profit forecasts and reaffirmed its ambitions to produce 9.7 million vehicles this fiscal year.

2nd Gear: Lordstown Motors Reports his first profit

But as Toyota saw a dramatic drop in revenue, an unlikely electric vehicle the manufacturer had recorded its first-ever profit. Struggling startup Lordstown Motors posted a profit in the first quarter of this year after selling assets, including its Ohio assembly line, to Taiwanese subcontractor Foxconn. Reuters reports:

“The EV Company reported a gain of more than $100 million in the April-June quarter from the sale of assets in Ohio, which was driven by the need for funding amid disruptions industry-wide supply chain and rising material costs.

“This allowed it to post a net profit of $63.7 million, compared to a loss of $108.2 million a year earlier.”

The VE The manufacturer says its all-electric Endurance pickup will likely go into production later this year. But earlier this year, the automaker warned that it was burning cash at an alarming rate.

In 2021, Lordstown Motors had $587 million in reserve, with whom she developed and built the all-electric truck. But by March of this year, that figure had fallen to just $203.6 million.. The sale of its Ohio plant to Foxconn was supposed to offer a short-term boost to the company as it approached the final hurdles to get its truck on the road.

3rd gear: Subaru is It’s fine, actually

Lordstown Motors wasn’t the only automaker to share something positive this morning. Japanese company Subaru saw its profits rise 24% in its latest quarter as tThe company “recovered lost production, increased sales and took advantage of favorable exchange rates”, according Automotive News.

The reports that Subaru’s operating profit reached 37 billion yen ($271.3 million) in the first fiscal quarter ended June 30. Subaru Said this the increase is due to the increase in sales as it “gradually overcame the production crimped by the Covid-19 pandemic and the global shortage of semiconductors”. Of Automotive News:

“Global production increased by 12% to 205,000 vehicles during the April-June period, which contributed to a 12% increase in global sales to 196,000 vehicles. The rebound helped Subaru gain a foothold after struggling to fill the product pipeline amid strong demand for its products.

“However, the biggest increase in Subaru’s earnings came from a windfall from the dramatic weakening of the Japanese yen against foreign currencies, particularly the US dollar.”

As the company’s fortunes continue to rebound from the struggles of the pandemic, Subaru chief financial officer Katsuyuki Mizuma has also called off talk of the recession in the United States. some 50,000 backorders” here.

Mizuma warned that limited production remains Subaru’s biggest hurdle.

4th gear: Toyota will buy Back up your EV

Earlier this year, Toyota made a great song and dance on her first EV, the BZ4X, which was produced in partnership with Subaru. The electric SUV has proven quite popular and Toyota has so far delivered nearly 3,000 of them to customers in the United States. But its rollout ran into problems, and now the company offers to buy back the vehicles affected by a recall.

After only two months of sale, Toyota Announces BZ4X Recall thanks to faulty wheels, which he says could come loose from the car while you’re driving. Not a good start for Toyota battery-powered future.

Now, according to Electrek, the firm is offering to buy back defective models as its recall continues to wane. The site says:

“Toyota announced the recall of the bZ4X in late June, citing potential for wheels falling off the new EV. Although this applies to all bZ4Xs produced, as it occurred shortly after the launch of the car, this is still a relatively small recall – only 2,700 vehicles.

“Now owners are receiving letters from the Toyota Company detailing the details of what Toyota is offering in return for the issues of this recall, and given the scope of the offer, it does not appear that the recall is going well. ”

The letter, seen by Electrek, asks owners not to drive their electric vehicles while Toyota seeks a solution to the problem.

While it investigates a fix, Toyota will store recalled vehicles and offer loaner cars to relevant customers. The car manufacturer will also reimburse the fuel costs of the loaner car, and even buy the vehicle back if you don’t like the sound of its solutions.

Electrek says the problem also affects Subaru’s Solterrabut deliveries of this model are not believed to have begun in the United States yet.

5th gear: Boeing employees agree Contract

Just weeks after threatening to strike, Boeing workers at three US factories called off industrial action and agreed to a new contract. More than 2,500 workers at the aerospace giant’s sites in the Midwest have voted to ratify a contract that their union says will raise wages by “an average of 14% over three years and add inflation adjustments.”

The Associated Press reports that members of the International Association of Machinists and Aerospace Workers at Boeing factories in St. Louis and St. Charles, Missouri, and Mascoutah, Illinois, accepted the contract earlier this week. According to the site:

“The union said the new contract includes a provision from the rejected agreement that calls for company contributions of up to 10% to employees’ 401(k) retirement plans, and it added a lump sum payment of $8,000 that can go to the employee’s account.. It also has improvements for sick leave and parental leave, and makes no changes to workers’ health insurance plans, according to the union.

The sites in question focus on Boeing’s military operation. As the company struggles to fill its commercial aircraft order books amid the ongoing pandemic, its defense and space businesses are booming.

The AP reports that in the first six months of this year, this sector accounted for about 38% of Boeing’s total revenue.

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