Different Fortunes for Toyota and BMW

Aug 8 2011

If your car insurance does not protect you against natural disasters, you might well end up with your car being destroyed one day and you being stuck with a car loan but no car.

However bad that might be, it is still nothing compared to what Japanese car manufacturers have to cope with after the recent earthquake/tsunami disaster which hit that country.

Toyota, for one, has been severely hit by what happened. The company made a quarterly loss during the three months ending on the 30th June 2011. This can mainly be ascribed to the fact that their operations were severely disrupted by the Japanese disaster.

Toyota made a loss of 108bn yen for the second quarter of this year, compared to a 211.7 billion yen profit for the same three months last year. While the situation is bad, it could have been worse: most analysts predicted a loss of 190bn yen.

Exactly how buoyant the Japanese economy is, however, can be clearly seen from the fact that the Japanese yen is currently in a much stronger position against the American dollar than a year ago. This, unfortunately, is part of Toyota's problem: a strong yen makes it more difficult for the company to compete with South Korean competitors such as Hyundai.

BMW, on the other hand, is doing exceptionally well right now. The company's net profit soared by 115% during the second quarter of 2011. This can mainly be ascribed to the fact that sales in the Chinese market increased by 52% during this period.

Author - Louise Hutchinson
 

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