Toyota Looks Increasingly to China as American Earnings Decline
- Lexus demand helps Japanese carmaker boost sales in China
- U.S. profitability wanes as market tastes shift toward SUVs
Toyota's Camry.
Photographer: Patrick T. Fallon/BloombergThis article is for subscribers only.
For Toyota Motor Corp., the U.S. market has been a profit paradise in recent years, powered by its legendary Camry sedan franchise. The Japanese automaker still makes a lot of money in America, but its profit margins are shrinking, prompting Toyota to double down on a far riskier market: China.
Third-quarter earnings from the car giant’s North America business slumped 45 percent as consumer preferences shift away from sedans such as the Camry toward pickup trucks and sport utility vehicles. Still, Toyota’s overall operating profit, a key financial metric watched by analysts, rose as the company earned more money in Asia and from vehicles exported from Japan.