Toyota Raises Profit Forecast on Rebounding Sales

Toyota said net profit came to ¥99.9 billion, or $1.1 billion, in the three months through December, a 23.5 percent increase from a year earlier, when the effects of Japan’s tsunami disaster still weighed on its business.

Sales for the quarter climbed 26 percent from a year earlier to ¥16.2 trillion, helped by an almost 50 percent surge in sales of the company’s fuel-efficient vehicles in the United States. Meanwhile, cost reductions at an automaker already known for its lean production saved the company ¥320.0 billion during the quarter, Toyota said in a statement.

Now Toyota, whose Super Bowl ad “Wish Granted” topped viewership rankings, is set to get a wish of its own: the weaker yen brought about by the economic policies of Prime Minister Shinzo Abe, who took office late last year, is set to lift Toyota’s bottom line even further.

A weak currency helps Toyota because it lowers the cost of producing in Japan, and inflates the yen value of overseas profits. Toyota is poised to get a particularly big boost from the weak yen, because it manufactures more cars at home than its domestic rivals. Last year, Toyota made 53 percent of its vehicles in Japan, and exported over half of those cars.

Toyota shares have risen by almost 50 percent since mid-November, when the yen started to weaken. The currency has weakened by about 15 percent over the same period.

In 2013, Toyota expects to sell 9.91 million vehicles, improving on its record of 9.75 million for last year, which helped it regain its crown as the world’s top-selling automaker from General Motors. Those sales figures include Daihatsu Motor and Hino Motors, which are part of the Toyota Group.

Such a performance could help Toyota climb back closer to the ¥1.7 trillion in net profit it booked in 2008, before the global financial crisis decimated its earnings. Since then, a recall scandal, natural disasters and a strong yen had hindered a full comeback. But the combined challenges have also forced executives at the 75-year-old automaker to revamp quality control, cut costs and take more risks with design to attract new audiences.

“We believe that our efforts have been bearing fruit,” Toyota senior managing officer Takahiko Ijichi said in Tuesday’s statement. “We are finally on the road to sustainable growth.”

Article source: http://www.nytimes.com/2013/02/06/business/global/toyota-raises-profit-forecast-on-rebounding-sales.html?partner=rss&emc=rss