Toyota surprises with profit, boosts forecast

Toyota Motor Corp reported a surprise profit Thursday and cut its projected red ink for the year by half, adding to growing evidence that carmakers are starting to recover from the deepest industry downturn in years.

F1 tensions resume after Toyota exit

The FIA yesterday expressed "concern" about Toyota's decision to quit Formula One and is currently seeking "urgent clarification" of the Japanese carmaker's legal position regarding its previous commitment to the sport...  

Toyota return to profits fuels hopes

Toyota trimmed its projected losses for the year to March 2010 to ¥200bn, from an earlier prediction of ¥450bnHopes that the global car industry is easing out of its slump gathered pace today after Toyota said it had returned to profit in the last quarter and cut its forecast losses for the full year.The world's biggest carmaker surprised industry observers by posting an unexpected ¥21.8bn (£146m) net profit for the three months to September, drastically down on the ¥139bn profit of last year but a sign of recovery nonetheless.It also trimmed its projected losses for the year to March 2010 to ¥200bn, from an earlier prediction of ¥450bn.That would be a significant improvement on the ¥437bn annual loss it reported in March, the worst performance in the company's 72-year-history.It expects to sell 7.03m vehicles this year, up from its earlier forecast of 6.6m.Toyota, whose president, Akio Toyoda, last month said it was just one step from "irrelevance or death", said cost-cutting measures and rising sales in Japan and China had helped offset to the damage to profits inflicted by the rising yen.Worries persist, however, that Toyota and other carmakers could see sales shrink again when government schemes in Japan, the US, China and Europe to encourage consumers to trade in old models for new, fuel-efficient cars come to an end.Toyota was expected to be the only Japanese carmaker to report a quarterly loss as it struggles under the weight of its huge global operation, built when it was registering record profits and chasing General Motors to become the world's biggest carmaker.Instead, its second quarter profits were markedly up on the ¥194bn loss it suffered in the April-to-June period.While demand in the US remains sluggish, Toyota has benefited at home from a revival in demand for its Prius petrol-electric hybrid, Japan's best-selling passenger car for the past five months.Currency woesYukitoshi Funo, Toyota's executive vice president, admitted that conditions in the US, traditionally its biggest market, were a major concern and that the firm would have to further reduce fixed costs to offset the yen's strength against the dollar."The overall business in the United States for us is still very severe," he told reporters.Toyota's results marked the end of an earnings season that could have been worse for Japan's battered carmakers, which have been forced to shed jobs and slash production as they feel the pinch from the global economic crisis.Yesterday Nissan said it was expecting an annual profit amid booming sales in China, while last week Honda also reported better than expected earnings.Analysts warned, however, that Toyota's cost-cutting regime would have to stay in place while the industry continues to recover."Next year will basically see a focus on cost cutting," said Koichi Ogawa at Daiwa SB Investments in Tokyo. "They really have to go back into the black next year. And considering the industry as a whole, it's hard to see next year's conditions being so remarkably good. There will have to be cost cuts and then expanding markets in the emerging economies."Toyota looks a little less attractive than other companies such as Honda and Nissan."The results were announced a day after Toyota said it was withdrawing from Formula One in an attempt to save about ¥50bn a year, leaving the sport without a single Japanese manufacturer.General Motors' decision to not sell its European operations has been seen as a sign that the car market is recovering. And earlier this week Ford posted a US profit for the first time in four years.ToyotaAutomotive industryJapanJustin McCurryguardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds

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