Toyota Says It Is Primed for a Lucrative Year

Toyota said net profit was 99.9 billion yen, or $1.1 billion, in the three months through December, a 23.5 percent increase from results a year earlier, when the effects of the Japanese tsunami still weighed on its business.

Sales for the quarter climbed 26 percent, to 16.2 trillion yen, helped by a surge of almost 50 percent in sales of the company’s fuel-efficient vehicles in the United States.

Cost reductions at the automaker, already known for its lean production, saved 320 billion yen during the quarter, the company 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 lift 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 more than 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 during the same period.

In 2013, Toyota expects to sell 9.91 million vehicles, improving on its record of 9.75 million 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 Toyota Group.

Such a performance could help Toyota get closer to the 1.7 trillion yen in net profit it reported in 2008, before the global financial crisis decimated its earnings.

Since then, a recall scandal, natural disasters and a strong yen have hindered a full comeback. But the combined challenges have also led executives at the 75-year-old automaker to revamp quality control, cut costs and take more risks with design.

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