TPCA profits from last year's cost-cutting measures

Toyota Peugeot Citroen Automobile (TPCA), the joint production venture between Toyota Motor Corporation and PSA Peugeot Citroen in the Czech Republic, kept profits steady in 2010 despite a drop in production, thanks to cost-cutting measures, company executives announced at a March 23 press conference in Prague.

Profits before tax came in at just under 1.4 billion Kč last year, nearly unchanged from the flat 1.4 billion Kč profits in 2009. This, despite unit production that dropped 11 percent in 2010.

"We managed to maintain good financial results even though the number of produced vehicles fell by 11 percent. The fall in production was caused because of the end of scrapping incentives," said Satoshi Tachihara, who has been TPCA president since January 2010.

TPCA's revenues dropped 16 percent to 44.7 billion Kč last year. In 2010, the facility produced 295,712 vehicles and expects a similar performance in 2011, Tachihara said. In 2009, the company produced 332,489 vehicles.

The number of temporary-contract workers dropped 89 percent last year, to a total of 17, and the number of full-time employees fell 8.6 percent, to 2,914.

Germany's scrapping incentive, which ended in August 2009, offered 2,500 euros in exchange for older vehicles that didn't meet current emissions standards. As a result, sales in Germany were down 23 percent last year.

"TPCA is a very strong exporter in the country. That's a very positive point for the Czech Republic," added Executive Vice President Bernard Million-Rousseau. The company's taxes contributed an estimated 2.2 billion Kč to the public budget, according to TPCA, and paid out more than 6 billion Kč in wages to its employees, of whom more than 70 percent come from the surrounding area of Kolín.

TPCA's biggest markets in 2010 were France, which accounted for 25 percent of exports, and Italy, with 16 percent. The United Kingdom and the Netherlands both accounted for 15 percent, and Germany imported 10 percent.

Tachihara said the company will continue to closely monitor the situation in Japan, where a March 11 earthquake and tsunami have hobbled much of the country's production.

"At the moment, we don't see any interruption in our own production, but we will continue to watch the Japanese recovery and the reconstruction or setup of production. ... If it takes longer, it may have some impact on our production in Europe," he said.

TPCA was created by the two automotive companies in order to share production facilities and technology at its plant in the Czech Republic. The initial investment was more than 650 million euros, and the plant began production in February 2005. The plant produces the Toyota Aygo, the Peugeot 107 and the Citroen C1, with 99 percent of products destined for export.

Tachihara said the plant is awaiting a future model to refresh production and help sales, but could not comment as to when that would be.

"It's not just the media but many employees have asked us about [the new model] and what the future of TPCA will be. ... Both mother companies spent a lot of money to invest into and build this facility [and] hired a lot of qualified employees," he said. "Can you imagine they would end this project after just one model generation?"

Claire Compton can be reached at
ccompton@praguepost.com