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FULL ARTICLE | EDITORIAL 
Toyota set to clear EU’s 2020/21 CO2 hurdle without BEVs  
Peter Schmidt | Editor

Published: Fri, 17th August 2018 18:14:28 GMT
 

Toyota Geneva Motor Show Mirari FCV

"Toyota remains the most successful carmaker. Now, that’s not a recent development. Despite bright new upstarts in the same field, such as Korea’s highly respected Hyundai-Kia, in retrospect Toyota has held this coveted pedestal autoindustry position for decades. The contrast between Japan’s auto giant and its major rivals is vivid. That’s both in the mass-market and particularly in the prestige car sector, where today hubris is more prevalent than in other industries. Contrast this with Toyota’s bigwigs. Even at the best of times, they wisely keep their feet on the ground. When some rivals turn to showmanship, drum rolls and sparkly fireworks, senior Toyota heads stand up calmly and quietly to deliver generally excellent bottom line figures of recent trading results. This year is no exception.

This second financial quarter ending June 30 this year, after posting largely unchanged vehicle sales, Toyota delivered an improved operating margin of 9.3 per cent thanks mainly to cost savings. 

This follows a financial year ending with an operating margin of 8.2 per cent. 

Sounds familiar? 

This places otherwise humble Toyota in the same high-up margin corridor as Germany’s world dominating prestige sector carmakers Mercedes, BMW and Audi. 

Take Mercedes cars, arguably the autoindustry’s longest established prestige sector car maker, as an example. Including its luckless Smart division with its ‘black hole’ financial history, this second quarter the Mercedes car brand delivered a solid 8.4 per cent pre-tax margin, following a 9 per cent margin this first quarter. 

BMW Automotive, a well-run and consistent performer like Toyota, ended this year’s second quarter with a weaker 8.6 per cent pre-tax EBIT margin. 

Audi, the third pillar of Germany’s long-ruling and fully global prestige sector juggernaut completed this second quarter with a 9.2 per cent margin. 


Toyota, which is also a true global automotive power and in consequence is subjected to the same headwinds as its German prestige sector rivals, lifted its second quarter margin to 9.3 per cent. 

This directly compares with 8.1 per cent during last year’s second quarter; a gain of 1.2 percentage points. 

By contrast, apart from Audi, both Mercedes and BMW posted smaller second quarter margins. 

Moreover, their significantly smaller UK-based Jaguar Land Rover rival already started bleeding red ink this second financial quarter. 

For the record, Toyota remains chiefly a long-established manufacturer of well-made and highly dependable mass market cars. 

Yes, there is also its Lexus brand, but for reasons best-known to Toyota seniors, it chose not to publicise a separate set of financial numbers for Lexus. 

Yet another distinguishing mark of Toyota-Lexus, stay close to your basic roots and leave the risky and expensive experimenting to your rivals. 

To this very day, when lesser automotive rivals have spent billions on the development of so-called new energy vehicles, Toyota steered well clear of today’s ultra-slow-selling BEVs. 

No doubt about it, as and when there is a business case or legal obligation, Toyota too will give would-be buyers exactly what they want. 

Whilst giving BEVs so far a miss, Toyota continued to soldier on principally with its comparative stone-age petrol-electric hybrid technology. 

And yet, judged from today’s fleet average of 103.5g/km at this year’s seven months stage in Germany, Toyota already stands out as a dead certainty to undercut the EU’s 2020/21 95g/km hurdle. 

Significantly, that’s without the likely cash-draining burden of registering and selling seriously high numbers of BEVs and PHEVs below cost in order to prevent crippling financial EU fines for not making the grade.  
 

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