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8-MAY-2008: In this March 30, 2008 file photo, the company logo
shines off the grille of an unsold 2008 Yaris at a Toyota dealership
in Boulder, Colo.. Toyota Motor Corp., the world's second-biggest
automaker by annual vehicle sales, is raising its prices on some U.S.
models later this month amid increased worries about its profit
growth in the American market, the company said Wednesday, May 7,
2008. (AP Photo/David Zalubowski, file) [Photo copyright 2008 by AP]
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TOKYO - Toyota said the strong yen and weaker U.S. sales took a bite out of January-March earnings and projected worse was to come - a 27 percent plunge in its full-year profit.HOT TRAVEL DEALS It would be the first drop in full-year profit in seven years for the automaker. The results and outlook released Thursday highlight how the tough North American auto market is hammering profits. Meanwhile, unfavorable currency swings added to a growing list of problems for Toyota Motor Corp., including soaring material and energy costs and a stagnant auto market in its home market of Japan. "There is no mistake that things are seriously tough - even for Toyota", said Tsuyoshi Mochimaru, auto analyst at Lehman Brothers in Tokyo. Still, the company appeared to be faring better than its American rivals. GM lost $3.3 billion in the first quarter. Ford had a surprise profit of $100 million for the same period but expects to lose money this year as the U.S. auto market deteriorates. Honda Motor Co., Japan's No. 2 automaker behind Toyota, said last month that its January-March profit declined 86 percent compared with the same period a year ago because of a corporate tax levied on its Chinese joint venture. Nissan Motor Co. reports earnings next week. For the fiscal fourth quarter, the automaker reported a 28 percent drop in net profit to 316.8 billion yen ($3.05 billion). It was the first decline in quarterly profit since April-June 2005. Sales rose 3.8 percent in the most recent quarter to 6.567 trillion yen ($63.14 billion). Toyota had been on a roll with the success of its fuel-efficient models, including the Prius and the Corolla subcompact, which have gotten a boost from rising gas prices. For the fiscal year ended March 31, Toyota racked up record profit of 1.72 trillion yen ($16.54 billion) - up 4.5 percent from the previous year. That was in line with the projection Toyota gave in February. Annual sales grew 9.8 percent to 26.289 trillion yen ($252.8 billion), also a record for the company. But recent credit woes in North America have dampened sales in recent quarters. "We are facing a severe business environment", President Katsuaki Watanabe said. "Toyota considers this headwind as a valuable opportunity to turn it into a more flexible and stronger company." Toyota projects this fiscal year's profit will tumble to 1.250 trillion yen ($12.0 billion), while annual sales are seen falling 4.9 percent to 25 trillion yen ($240.4 billion). The last time the company's fiscal profit declined was in the fiscal year ending March 2002; the last time annual sales fell was in the year ending March 2000, mainly because of a weak dollar. Toyota - the world's second-biggest automaker after General Motors Corp. - also warned it will need to spend more in technology research and carry out cost cuts to stay competitive. The recent shift to smaller cars is a crunch for the makers because those vehicles are cheaper and have smaller profit margins than trucks and other gas guzzlers. Toyota has been steadily boosting sales in recent years at a pace some analysts say is on track to overtake General Motors as the world's No. 1 automaker in annual vehicle sales. For the fiscal year ended March 31, Toyota sold 8.91 million vehicles around the world. That was slightly below the 8.93 million vehicles it had expected to sell for the fiscal year, but still 4.5 percent better than a year earlier. North American vehicle sales, which had been strong for Toyota in the past, fell for the last fiscal quarters, according to the company. Japanese sales have also been stagnant recently. Toyota said it expected to sell 9.06 million vehicles globally for the fiscal year through March 2009, up 1.6 from the year just ended. Toyota shares slid 1.8 percent to 5,480 yen ($52.7) in Tokyo. The results were released just as the market closed.
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8-MAY-2008: Toyota Motor Corporation President Katsuaki Watanabe
speaks during a press conference in Tokyo, Japan, Thursday, May 8,
2008. Toyota's profit for the fiscal fourth quarter dropped 28
percent from the previous year as a strengthening yen and lagging
North American sales chipped away at the Japanese automaker's
earnings. "We are facing a severe business environment", Watanabe
said. "Toyota considers this headwind as a valuable opportunity to
turn it into a more flexible and stronger company." (AP Photo/Shizuo
Kambayashi) [Photo copyright 2008 by AP]
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