Toyota surprised the automotive industry after announcing the cutting of 800 subcontractors in Thailand as part of its voluntary redundancy program.
Recently, Toyota reported a voluntary redundancy program wherein the shedding of workers will be prioritized. The Japanese automaker deals with low automobile sales in Thailand since the government had ended the subsidy program. Toyota had 13.4 percent drop in sales already from June to May while the company covers one third of the local auto market in Thailand.
Based on the data released, the 800 subcontractors will be given a specific bonus and a month salary. Also, they have accepted a termination agreement and it will take effect on July 13. Prior to the redundancy program, Toyota had around 18 thousand workers from its three factories in Thailand with a maximum capacity of 760,000 units yearly.
Only in 2012 did the automotive company experience a rally in sales. Prime Minister Yingluck Shinawatra had influenced the general public to own a car which drove the sales of the automobile industry higher.
Is Auto Industry Heading To A Downturn?
As the redundancy program looms over the market, the car makers remained certain that the over all automotive industry was still stable in Thailand. And still, Toyota puts confidence in the great potential of automotive sales in Thailand despite the recent layoff plans.
Surapong Paisitpatanapong, a spokesman for the Federation of Thai Industries' automotive club, explained that the expired first-time car buyer scheme's negative impact remains potent and will put continued pressure on Thailand's car market, but the country's economic fundamentals remain strong and are capable of creating annual car sales of up to 900,000 vehicles based on Thai per capita income of $6,000 a year.
On the other hand, Thanawat Koomsin, president of the Thai Automotive Industry Association had a different opinion on the matter. He said ‘Under the current situation, it is a simple way to cut the number of workers, especially contract workers. Before making any decision to axe workers, each maker has already adjusted operating time as a first stage, because automotive manpower is trained with full skills and it is not a good idea to just let them go.’
Toyota Corporation Dominates
In other news, Toyota remained on the top of domestic sales with the 142,562 Toyota Prius units sold in the first half of 2016. After the full model change in December 2015, Prius started the year with a bang as the fuel-efficient and small cars have been one of the best selling units in Japan.
In Michigan, Toyota Camry has undergone road testing and caught the attention of the car enthusiasts. The new Toyota Camry, which is based on the Toyota New Global architecture, will be released in the market in 2017. Aside from the major design changes, it is forecasted to have better dynamics and lighter body.
Moreover, the Innova Crysta is now available in a petrol avatar after the market Trial in India. The company will start to deliver in August and has begun accepting bookings as well. Toyota also increased the production of Toyota MPV after the upbeat sales and increase of demand.
Shares of Toyota Motor Corporation changed hands 0.18 percent higher or 9.00 points to 5,073.00 JPY earlier. The stock has a market capitalization of 16.93 trillion yen with a price earnings ratio of 6.91 percent. It has a dividend yield of 4.14 percent an an average trading volume of 424, 119.
Toyota has a 52-week high of $136.39 and a 52-week low of $97.80. Further, it has a target price of $113.18 plus an outstanding total shares of 1646.19. The gross margin of the company is 24.50 percent with an operating margin of 10.10 percent an a profit margin of 8.10 percent.
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