Comments on: Is Toyota in Trouble?

By: hybrid vehicle prices

hybrid vehicle prices — Thu, 15 May 2008 11:07:13 +0000

[...] the article: Net income fell 28 percent to 316.8 billion yen 3 billion in the three months endehttp://lssacademy.com/2008/05/08/is-toyota-in-trouble/Toyota raises prices on some cars amid profit growth fears Baltimore SunProfit growth fears spur [...]

By: Ron Pereira

Ron Pereira — Fri, 09 May 2008 20:26:18 +0000

Tom, you win the prize for the most creative comment (so far)!

By: Tom

Tom — Fri, 09 May 2008 19:16:00 +0000

Hey, its all about what the customer values and what they’re willing to pay for. If they value these models for their higher mpg, lower total cost of ownership, etc., then they’ll pay the extra 2.1%. If they don’t, Toyota will see this and will adjust production to meet demand, lower the cost, cut the price, or perhaps all of the above.

That’s why they make $10 billion and Detroit burns through cash faster than a Gamblers Anonymous drop out at a Greektown casino.

By: Ron Pereira

Ron Pereira — Fri, 09 May 2008 16:54:53 +0000

Lester, actually I am surprised an experienced blogger like Mark fell into my little trap! Ha! Just messing with you, Mark. I love your passion, man.

In all seriousness… of course Toyota continues to kill the market – even in these turbulent times. Any company upset with $3B net income has lost their mind!

And while I didn’t take a definitive stance in this article (I actually did in the first draft but decided to remove it since I figured more comments would come this way and comments are what makes for a good blog if you ask me) I see this little bearish blip as nothing more than common cause variation.

Now then, it only takes a few data points to develop a statistical trend so let’s all keep our eyes peeled for next quarters results. I’m betting things will once again head north for the Big T in the near future.

Thanks for all the comments everyone.

By: Lester Sutherland

Lester Sutherland — Fri, 09 May 2008 13:55:12 +0000

Mark,
I think you have caught Ron buying in to the quarterly state of mind. Or were you just testing us Ron?

By: Mark Graban

Mark Graban — Fri, 09 May 2008 02:06:18 +0000

Oh, and seriously… they earned THREE BILLION DOLLARS. Please don’t overreact to any one quarter like the news media does. GM is “turning around” according to the media after one good quarter and then floundering again after the next quarter is bad. Think long-term, don’t worry about one quarter’s performance.

It’s a better question to ask about Toyota’s recalls and increasing quality problems… that’s a better indicator of how their system is working (or not working) than one quarter’s financial statement.

By: Mark Graban

Mark Graban — Fri, 09 May 2008 02:04:24 +0000

Ultimately, I’d suspect (like other companies) that they’re raising prices because they can. “Rising costs” is a politically correct excuse to customers… why not use that excuse if everyone else does?

By: Ron Pereira

Ron Pereira — Thu, 08 May 2008 16:53:01 +0000

Thanks Mike! I’ve fixed it… thanks for catching this.

By: Mike Z

Mike Z — Thu, 08 May 2008 16:36:51 +0000

I think you’ve got a typo in Ohno’s formula. Profit = Price – Cost

By: John Hunter

John Hunter — Thu, 08 May 2008 16:13:09 +0000

They are in great shape. They are going to earn something like $10 billion? in this “bad year” – hardly a bad sign in my opinion http://management.curiouscatblog.net/2007/11/05/2007-has-been-a-difficult-year-for-toyota/>I wrote on Toyota’s “difficult” 2007 earlier. I am very happy to be a stockholder.