Toyota registered 73 per cent profit growth in FY18 but the market share of the company dropped and they are focusing on profit rather than volume
Toyota Kirloskar Motor is one of the most profitable companies in India and they are continuing the growth momentum as the company increased its profits to Rs. 965 Crore in FY18, which is highest ever by Toyota. The company was able to post a profit of more than 500 crores for the fourth straight year in a row.
The revenue has dropped to Rs. 18,998 crore in FY18 compared to Rs. 21,151 crore in FY18. The profit has increased by 73 per cent but the annual sales dropped by 2 per cent to 1,40,000 units. In FY13, the company had a 6.21 per cent market share but ever since that it has been dropping and in FY18, the market share is at 4.28 per cent.
Toyota is focusing on profit rather than volume, the Innova and Fortuner are the best selling models in their respective segments as both these models are priced considerably higher than rivals but still, the company is able to sell them in good volume along with Etios sedan, which is so popular among the fleet buyers.
Globally the company is focusing on profit as the former managing director of Toyota introduced some strict cost-cutting in sourcing, manufacturing, selling and marketing, which helped the company to make profits even if the capacity utilisation is just 50 per cent. The Yaris is the first all-new Toyota in India after almost eight years.
The company want to increase its customer base and the Yaris sedan is expected to bring in good numbers but the sales data doesn’t reflect this. Toyota priced the sedan at a premium like its other products but the segment has lots of options and the Yaris was offered with just a petrol engine option, which limited its reach.
Toyota offered automatic variant even from base variant along with class-leading safety features but customers preferred established rivals. We can expect the company to revise pricing to improve sales of Yaris and Etios lineup might get an update as both the hatchback and sedan has been in the market for a very long time now.