Toyota expects N.A. rebound to propel profits
Akio Toyoda: "A good cycle is in motion."
TOKYO -- Toyota Motor Corp. aims to put three years of crises in the rearview mirror thanks largely to the market again poised to be its biggest cash cow: North America.
After limping through the global financial meltdown, an unprecedented recall imbroglio and a year lost to the devastating earthquake in Japan and massive flooding in Thailand, Toyota is back.
And central to the comeback is North America.
Traditionally Toyota's top-selling region, North America dropped to No. 2 behind Japan in the fiscal year that ended March 31, with supply pinched by last year's natural disasters.
But Toyota predicts North America will reclaim its spot as the company's biggest market in the current fiscal year, as inventories fill up and new products are launched.
Rising sales in North America and elsewhere will propel the automaker's net profit to nearly triple in the fiscal year that began April 1, Toyota predicted.
Unveiling the company's fiscal year earnings on Wednesday, May 9, President Akio Toyoda predicted North American sales would surge 24 percent to 2.35 million units in the current fiscal year. That's up from 1.9 million in the last fiscal year.
"I really feel like a good cycle is in motion," Toyoda said.
"I want this year to be a normal and peaceful year. So long as we have that, the efforts we have made in the past three years will start delivering results and benefits," he said.
The outlook for North America would push it past Japan in sales for the automaker.
Toyota forecasts that Japan will sell 2.2 million units this year, up from 2.07 million last year. But there is one big difference: North America makes money, Japan doesn't.
North American operating profit dropped 45 percent to ¥186.4 billion, or about $2.27 billion, last year.
But Toyota's Japanese operations have racked up operating losses for four straight years.
North American profits -- despite softening -- helped to mitigate Toyota's overall earnings tumble.
Global operating profit fell 24 percent to $4.32 billion for the year. That compares with a 59 percent plunge at rival Honda Motor Co., which had its operating profit wither to $2.81 billion.
Toyota's net profit dropped 31 percent to $3.45 billion in the fiscal year just ended, as revenues fell 2 percent to $225.89 billion. But in the current fiscal year, Toyota forecasts, net will surge to $9.24 billion as revenues rise 18 percent to $267.41 billion.
Toyota's U.S. sales are off to a solid start this year. Through April, Toyota Motor Sales U.S.A. volume was up 12 percent to 665,327 vehicles, outpacing the overall market's 10 percent increase.
Toyota expects a boost this year from new models such as the Prius C and Scion FR-S, and from redesigned nameplates, including several Lexus models.
Revived North American sales will power Toyota to near record global sales of 8.7 million vehicles this fiscal year, the company says. Toyota's worldwide sales peaked at 8.91 million units, on a fiscal basis, in the year ended March 31, 2008.
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