Toyota Beats Detroit 3 in Per-Car Profit

Even though Detroit’s automakers are performing strongly these days, Toyota still puts them to shame when it comes to profits. 

Based on each company’s 2014 earnings before interest and taxes, Toyota made about $2,276 on every car it sold last year, compared to just $994 at Ford. Per car profits are even lower at Chrysler and GM, coming in at $850 and $654 respectively.

Some of this can be contributed to the weak Japanese Yen, which cheapens the price of Japan’s exports and allows Toyota to sell its cars for less in the U.S. Some automakers, including Ford, have called out federal regulators for not helping to crack down on alleged currency manipulation. Investment firm Morgan Stanley says that roughly $2,000 per export vehicle goes back to Japan’s largest automakers as a result of the low currency rate.

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Japan has denied having any involvement in fixing the currency rate.

Labor costs are also a concern as Ford and GM still pay more than Toyota and Honda to produce cars, despite a recent reduction in labor costs for U.S. automakers. Legacy costs also put a strain on Detroit automakers, who collectively contributed $3 billion last year to employee pensions and healthcare related funds.

 [Source: Detroit News]

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