P&A Providers & Administrators
MenuMENU
SearchSEARCH

Toyota Lowers Annual Profit Forecast After Thailand Floods

December 9, 2011
4 min to read


Toyota Motor Corp., poised to lose its crown as the world's largest carmaker this year, cut its profit forecast 54 percent after Thailand's worst floods in almost 70 years disrupted production.


Net income will fall to $2.3 billion in the 12 months ending March 31, the Toyota City, Japan-based carmaker said in a statement. That's lower than its previous forecast and misses the 393 billion yen average of 21 analyst estimates compiled by Bloomberg. The company also cut projections for operating profit and sales, reported The Detroit News.

Ad Loading...


The Thai floods led to component shortages worldwide, disrupting output of Camry and Corolla sedans at plants as far away as the U.S. That compounded the challenges faced by Japanese carmakers in a year marred by the record earthquake and tsunami in March, as well as the surge in the yen.


"While Toyota is gradually building up inventory of its new Camry sedans and its popular models, sales haven't entered a recovery phase yet," said Issei Takahashi, a Tokyo-based analyst at Credit Suisse Group AG. "It will probably be after February that Toyota's sales will begin recovering."


Toyota fell 0.4 percent in Tokyo trading before the company released its forecasts. The stock has fallen 18 percent this year, underperforming Japan's benchmark Nikkei 225 Stock Average.


Toyota delayed the new projections by a month because of the floods. Honda Motor Co., which also pushed back its forecasts because of Thailand, aims to disclose them by the end of January, Chief Financial Officer Fumihiko Ike said last week.


By contrast, Nissan Motor Co., Japan's second-largest carmaker, last month raised its profit forecast after its vehicle sales in China rose and the company recovered faster than Toyota and Honda from the earthquake.

Ad Loading...


The maker of the Camry sedan cut its forecast for operating profit 56 percent to 200 billion yen, meaning the company will probably earn less profit than Nissan for the third time in four years. The forecast missed the 405 billion yen average analyst estimate compiled by Bloomberg.


The company, likely to cede its three-year reign as the world's biggest carmaker to General Motors Co. in 2011, also cut its sales forecast to 7.38 million vehicles from an earlier projection of 7.6 million.


In Thailand, the floods created a second wave of factory disruptions for Japanese carmakers such as Toyota, which had taken six months to restore production hobbled by Japan's March 11 natural disaster.


Disruptions from Oct. 10 to Nov. 25 caused 215,000 vehicles in lost production, or 2.8 percent of the annual target. By comparison, Nissan estimates its lost production at 60,000 units, or 1.3 percent of its targeted annual production worldwide.


Toyota probably lost more output than any other carmaker because of the floods, said Masatoshi Nishimoto, a Tokyo-based senior manager at research firm IHS Automotive. Toyota may not be able to make up for lost production of models such as the Vigo SUV until September because the company had procured about 90 percent of the vehicle's parts from Thailand and won't easily find alternate suppliers, Nishimoto said.

Ad Loading...


Toyota revised its outlook for the yen against the dollar to 78 from 80. The stronger domestic currency reduces the value of overseas sales.


GM and South Korea's Hyundai Motor Co. have benefited while their Japanese rivals struggled. Detroit-based GM's vehicle sales are poised to overtake Toyota's this year and analysts estimate Hyundai will earn $6.2 billion in profit during 2011, more than double Toyota's.


Still, President Akio Toyoda is aiming to regain lost market share from 2012. At the Tokyo Motor Show last week, the grandson of the founder showed off the company's new 86 coupe, betting the car will widen Toyota's appeal.


The automaker also displayed a plug-in version of its best- selling Prius hybrid that will go on sale from January. The Prius PHV will become a "winner" that will take sales from GM's Chevrolet Volt, according to CLSA Asia-Pacific Markets analyst Chris Richter.


A recovery may already be under way in the U.S. Toyota's November vehicle sales in the country rose for the first time in seven months as supply at dealers recovered and consumer confidence surged the most in more than eight years.

More Industry

Photo of gray SUV plugged into public electric-vehicle charger in parking lot
Industryby Hannah MitchellJuly 21, 2026

World EV Adoption Set to Grow

A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.

Read More →
Bar chart of truck and SUV segments' weekly value change
Industryby StaffJuly 21, 2026

Black Book: Weekly Market Update

Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.

Read More →
laptop with blue car on screen on a shopping website, Clear Costs Convert
Industryby Lauren LawrenceJuly 21, 2026

Pricing Transparency Drives Purchase Consideration

An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.

Read More →
Ad Loading...
Bar graphic of used-car segment weekly change
Industryby StaffJuly 14, 2026

Black Book: Weekly Market Update

Used-vehicle market depreciation was the prevailing story in the wholesale market last week.

Read More →
Light-blue Fiat car parked on a sunny Chicago street
Industryby Hannah MitchellJuly 14, 2026

Smaller Is Looking Better

A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.

Read More →
man sitting at desk using calculator with charts in front of him, to-go coffee cup on desk, rising and falling data chart in front
Industryby Lauren LawrenceJuly 14, 2026

U.S. EV Market Slowly Stabilizes

U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.

Read More →
Ad Loading...
blue background, map of the world with connecting lights and an electric vehicle emblem in the middle
Industryby Lauren LawrenceJuly 8, 2026

Global EV Market Entering New Phase

Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.

Read More →
Bar chart showing week-over-week wholesale automotive price change
Industryby StaffJuly 7, 2026

Black Book Weekly Market Update

The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.

Read More →
Photo of Honda CR-V SUV on two-lane road next to roadside trees
Industryby Hannah MitchellJuly 1, 2026

Auto Affordability in Context

Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.

Read More →
Ad Loading...
Line chart of used-vehicle days to turn over past week
Industryby StaffJune 30, 2026

Black Book: Weekly Market Update

Automotive auction inventory increased last week, giving choosy bidders even more leeway.

Read More →