Various articles featured in business media point out that Toyota has finally bounced back from compounding supply chain setbacks brought about by the 2011 tsunami that struck northern Japan, the subsequent monsoon floods that struck Thailand and a series of embarrassing setbacks related to product recalls and quality. It has taken almost a year and a half, along with a lot supply chain related effort, to achieve this milestone.

Last week, this global automaker reported $3.7 billion in net profits for its fiscal first quality, significantly larger than the mere $1.5 million in profits reported a year earlier. In the past six months, In the latest reports, Toyota has outsold its largest rivals, Volkswagen and General Motors, again putting this automaker on-track to assume the global lead in auto sales.  Last week, Toyota also raised its output volume forecast by 100,000 vehicles for the current fiscal year, targeting 8.8 million vehicles in total output. Toyota’s stock however has not bounced-back from its peaks reached just before the crisis.

Toyota was not the only Japan based OEM to demonstrate a comeback.  Honda has also regained sales volume and market share as it ramps-up aggressive promotional activities supporting its various models. According to a report published in The Wall Street Journal last week, Asian import brands increased their U.S. market share to 45.6 percent vs. the three U.S. OEM’s market share of 44.7 percent. In fact, the foreign brands of Hyundai, Nissan and Volkswagen all had positive U.S. sales numbers in July while Ford and General Motors contracted.  In the WSJ article, a southwest U.S. dealership executive is quoted as stating that Toyota sales are on fire, with Honda not far behind.

Toyota and other Japanese OEM’s have overcome some serious setbacks related to supply disruption, an economic climate in Japan that challenges any sense of profitability in Japan based production, along with the need to deal with building global uncertainty.  Supply Chain Matters has posted a number of commentaries related to these challenges. It seem that consumers have patiently waited for the Japanese OEM’s to correct their problems, and offer the proper incentives.

After such positive results, we thought it would be best to issue a Supply Chain Matters “thumbs-up” to the entire Toyota and Honda supply chain teams for their extraordinary efforts in overcoming extremely tough and difficult challenges these past 18 months.  Each has demonstrated that what is accomplished in the global supply chain does matter to bottom-line results.

Bob Ferrari