November 22, 2024

Toyota Cuts Annual Profit Forecast by 54 Percent

Net income at Toyota, which analysts say is likely to lose its title as the world’s biggest automaker this year, is expected to fall 54 percent to 180 billion yen, or $2.3 billion, in the fiscal year that ends in March, the automaker said in a statement.

Global sales are likely to fall to 7.38 million vehicles, down from an earlier forecast of 7.6 million, Toyota said.

Those sales numbers are likely to put Toyota behind General Motors, which sold 7.48 million units last year and is on a big recovery push
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The lower profit projections, meanwhile, could put Toyota behind rivals closer to home. Nissan forecasts a 290 billion yen net profit this year, while analysts told Bloomberg that the South Korean automaker Hyundai could earn over $6 billion this year. Toyota still produces more cars than any of its Asian rivals, however.

Toyota has been hit especially hard by Thailand’s worst flooding in decades, which has killed more than 600 people, damaged millions of homes and inundated hundreds of factories.

The disaster disrupted production at plants as far away as the United States, causing a net shortfall of 230,000 vehicles, Toyota said — almost four times the number at Nissan. Toyota says waters are now receding and most regions are back to normal output.

The flooding came just as Toyota and other Japanese manufacturers rebounded from Japan’s massive quake and tsunami in March, which severed supply chains and caused the company to suspend or reduce production at plants both in Japan and overseas.

A shortage of electricity in the wake of the nuclear disaster at Fukushima has also complicated efforts by Toyota to get production back on track.

Meanwhile, a stubbornly strong yen has weighed on Toyota’s bottom line by making production in Japan more costly and by eroding the value of its overseas profits. Toyota still makes over half of its cars in high-cost Japan, a setup that analysts have warned hurts the automaker’s competitiveness.

Toyota, based in Toyota City, Japan, hopes that a spate of new models will revive its fortunes. At the Tokyo Motor Show, which started last week, the automaker’s chief executive, Akio Toyoda, showed off a plug-in version of its popular Prius gas-electric hybrid vehicle.

Toyota shares, which have fallen 18 percent this year, dipped 0.4 percent in Tokyo before the forecast announcement.

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Ford Tops G.M. as Auto Sales Rise for All but Toyota

Nissan, Hyundai and Kia each set new monthly sales records, figures released on Friday showed. Chrysler sales rose 31 percent, to their highest level in nearly three years.

But Toyota said its sales fell 6 percent from a year ago, when it was offering big discounts after two major recalls. Toyota’s top-selling models, the Camry and Corolla sedans, each were eclipsed by competing models from Honda, whose total sales rose 23 percent.

None of the carmakers, including Toyota, said the disaster in Japan had cut into March sales, but Ford and Nissan said that they would have down time this month at some North American plants that buy some parts from Japan. Both companies said the plants had previously scheduled shutdowns for later in the year.

Nissan said it was halting production for six days at its three United States plants and for five days at its two plants in Mexico. Nissan also said it would ship some engine components made in Tennessee to Japan to compensate for lost production at a damaged plant.

Ford said a plant in Louisville, Ky., that builds heavy-duty pickup trucks and large sport utility vehicles would halt production next week to conserve supplies of an unspecified part from Japan. Ford said it had more than enough of those vehicles already.

Ford, the most profitable of the Detroit carmakers in 2010, said its sales rose 16 percent in March from a year ago, accounting for Volvo sales last year. It sold 212,295 vehicles, 5,674 more than G.M., which reported a 10 percent increase, according to figures from the industry tracking firm Autodata.

Separately, Ford said Friday in a filing with the Securities and Exchange Commission that its top two executives, Alan R. Mulally and William Clay Ford Jr., each received compensation worth $26.5 million in 2010, when the company earned $6.6 billion and paid bonuses averaging $5,000 to hourly workers.

Across the industry, sales of subcompact and compact cars accounted for about one of every four vehicles purchased last month, up from 19 percent in December. But automakers remain on pace to sell about 13 million cars and trucks this year, in line with forecasts from several months ago.

Analysts said they saw few signs that the rise in gas prices was causing consumers to shy away from buying a new vehicle.

Ford sold 9,787 of its subcompact Fiesta, the most since it was introduced last summer, and sales of G.M.’s Chevrolet Cruze compact increased 75 percent from last year’s performance of its predecessor, the Cobalt. In addition, G.M. said customers on average paid more than $19,000 for the Cruze, about $3,000 more than the Cobalt sold for last year.

“We don’t see anything significant that’s going to slow down the industry,” Don Johnson, G.M.’s vice president for United States sales operations, said in a conference call. “I don’t see a big change in consumer demand, unless something very dramatic comes out of Japan that we don’t see right now.”

Sales of Toyota’s popular hybrid car, the Prius, were up 58 percent. But the company has only about 18 days’ worth of Priuses in inventory, and dealers say many of those left are already spoken for.

Toyota resumed limited production of the Prius and two other hybrid models in Japan this week, but the rest of its plants in that country remained down, as they have been nearly every day since the March 11 earthquake and tsunami. Still, vehicles typically take several weeks to cross the Pacific Ocean, and longer to reach the East Coast.

“We’ve been there many, many times before with this vehicle — having demand ahead of supply — but we’ve been able to manage that,” Robert S. Carter, a Toyota group vice president, said in a conference call with reporters.

But even if everyone who wanted a Prius was able to find one, they would probably have to pay significantly more to get one than they would have a few weeks ago. Jesse Toprak, vice president of industry trends and insights at TrueCar, which tracks vehicle sales and pricing, said average selling prices for many fuel-efficient cars and Japanese-made vehicles had been on the rise as demand grew and inventories shrank.

The Prius, which fits into both categories, is now selling for its sticker price at many dealerships, about $3,000 more than in early March, Mr. Toprak said. The Honda Fit, a small Japanese-made hatchback, is selling for about $500 more.

Howdy Honda in Austin, Tex., is sold out of the base model of the Fit and probably will run out of some other nameplates in the next month or so, Cliff Collier, the general manager, said.

“The pipeline from Japan has just been shut off,” Mr. Collier said. “Just about everything that’s made over there, we can see it disappearing on the horizon although we’re not totally out.”

The supply issues could hinder Honda and other Japanese automakers, which have benefited from periods of high gas prices but could have trouble getting enough of their most fuel-efficient cars to the United States. Many are either built in Japan or contain Japanese-made parts.

“It could have been a time for us to really shine, but as it is, we’re going to have to do the best that we can,” Mr. Collier said. “We’ll probably have to beef up our used-car operation.”

The plant shutdowns in Japan have cut output by more than 400,000 vehicles, the research firm IHS Automotive said this week.

Article source: http://www.nytimes.com/2011/04/02/business/02autos.html?partner=rss&emc=rss