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How Did Toyota’s Fiscal 2016 Revenues Rise and Fall at the Same Time?

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May. 13 2016, Updated 12:30 p.m. ET

The largest automaker in the world

Toyota Motor Corporation (TM) is the largest automaker by volume in the world. In fiscal 2016 (April 1, 2015, to March 31, 2016), the company’s consolidated vehicle sales stood at 8.68 million units, which is 3.2% lower than 8.97 million units in fiscal 2015.

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Toyota’s revenues

Despite the decline in vehicle sales, the company managed to report strong revenues of 28.4 trillion Japanese yen, which is 3.4% higher than the 27.2 trillion yen in fiscal 2015. These higher revenues were primarily driven by favorable currency movement.

But in US dollar terms, Toyota’s revenues declined to $236.8 billion in fiscal 2016, which was 5% lower than the $249.0 billion one year previously. The strong US dollar and lower shipments were the key reasons behind these lower revenues in dollars.

We should note here that as a Japanese automaker, Toyota reports its earnings in yen, so investors should pay attention to the company’s yen revenues as well as dollar revenues. In the past several quarters, the US dollar has witnessed a sharp rise against the basket of currencies, including the euro and the Japanese yen. Because of this, European and Japanese automakers (FPX) such as Fiat Chrysler Automobiles (FCAU), Volkswagen (VLKAY), and Honda (HMC) also have benefited.

Higher revenues from Japan

In fiscal 2016, Toyota’s revenues from Japanese market stood at ~14.8 trillion yen, which is 2.5% higher than in fiscal 2015. During fiscal 2016, the company sold 2.1 million vehicle units in its home market. This represents a decline of 4.4% in consolidated vehicle sales in Japan. According to Toyota, its new models including Sienta and the Prius drove its sales higher. However, its overall vehicle sales declined due to sluggish demand for mini-vehicles.

Continue to the next part for our discussion of Toyota’s North America revenues in fiscal 2016.

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