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Toyota Registers Surprise Profit

May 12, 2010
2 min to read


TOKYO — Toyota Motor Corp. has provided the clearest signal yet that it has stanched the bleeding associated with its global recalls, unveiling a surprise fiscal-fourth-quarter profit and forecasting an earnings increase this year as it attempts to boost sales in Asia and cut more costs, reported The Wall Street Journal.


The world's biggest carmaker expects net profit to grow 48 percent to 310 billion yen ($3.32 billion) in the current fiscal year through March 2011. It posted a net profit of 112.2 billion yen in its fiscal fourth quarter after a net loss of 765.8 billion yen in the same period a year earlier.

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The forecast is a sign that Toyota's recall of more than 8.5 million vehicles isn't likely to stall its recovery after the company recorded its first annual net loss in 59 years in the fiscal year ended March 2009.


"We are still in the storm, but even in the same storm, we see the sky starting to clear up in the distance," Toyota President Akio Toyoda said at a press conference.


The effect on vehicle sales from the recalls wasn't as significant as expected, and the costs were in line with the company's earlier estimate, Takahiko Ijichi, a senior managing director, said.


"The impact of the recalls was smaller than we had expected, supported by sales-promotion measures," he said. Global sales totaled 7.24 million vehicles for the fiscal year ended March 2010, topping its target of 7.18 million, he said.


The Japanese carmaker booked recall-related costs of 170 billion yen to 180 billion yen in its fourth quarter, including promotional costs and expenses to repair problems with gas pedals, floor mats and braking systems. He declined to disclose the level of similar costs the company expects for this fiscal year.

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Toyota is pushing ahead with its effort to regain customer trust by setting up regional quality committees worldwide. The company last month decided to recall 36,000 2010 Lexus GX 460 sport-utility vehicles relatively soon after Consumer Reports magazine pointed out the vehicles' rollover potential in certain situations. Toyoda on Monday said U.S. Transportation Secretary Ray LaHood, who has criticized Toyota's slow response to quality concerns, told him it was a swift decision.


Despite the recalls, the car maker has had solid sales growth in Asia because of booming demand in China and India, while discounts recently helped lift sales in North America.

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