Toyota Narrows Loss Forecast on Government Stimulus
Nov. 5 (Bloomberg) -- Toyota Motor Corp., the world’slargest carmaker, narrowed its full-year net loss forecast for asecond time after government stimulus measures revived vehicledemand in the U.S. and Asia.
The company expects a net loss of 200 billion yen ($2.2billion) in the year ending March 31, compared with an earlierforecast for a 450 billion yen loss, it said in a statementtoday. The company posted an unexpected second-quarter profit of21.8 billion yen.
Toyota joined Nissan Motor Co. in predicting a smaller lossafter government tax cuts and subsidies spurred global cardemand. President Akio Toyoda, who said last month the companywas one step from “irrelevance or death,” has ordered thecarmaker’s first plant closure and an exit from Formula Oneracing to cut costs.
“Toyota’s sales are picking up more than initiallythought,” said Koichi Ogawa, chief portfolio manager at DaiwaSB Investments Ltd. in Tokyo, which manages 3.4 trillion yen.“Like Honda and Nissan, Toyota is benefiting from governmentstimulus programs.”
The Toyota City, Japan-based maker of Corolla compact carsraised its full-year revenue forecast to 18 trillion yen from16.8 trillion yen, as it boosted vehicle sales estimates forAsia, Japan and North America.
Global Sales
Toyota’s improved outlook follows Honda Motor Co. almosttripling its profit estimate last week. Nissan Motor Co.narrowed its loss forecast, citing better-than-expected sales inChina. Hyundai Motor Co., South Korea’s biggest automaker,posted a record profit in the quarter on surging U.S. and Chinasales and a weaker won.
The carmaker raised its global vehicle sales forecast to7.03 million, from its August forecast of 6.6 million. Thecompany sold 7.57 million units last fiscal year.
“Demand-stimulating measures by governments worldwide havecontributed to our revised targets for the full fiscal year,”Executive Vice President Yoichiro Ichimaru told reporters inTokyo. “We continued to make improvements in the reduction offixed costs.”
Toyota fell 0.8 percent to close at 3,580 yen in Tokyotrading, before the earnings announcement. The shares havegained 23 percent this year.
Plant Closure
The carmaker said in August it would shut its New UnitedMotor Manufacturing Inc. assembly plant in Fremont, California,the first factory closure in Toyota’s 72-year history. Acollapse in U.S. auto sales to the lowest level since 1976 leftToyota struggling to keep North American plants running atcapacity.
The withdrawal from Formula One from next season, announcedyesterday, may save Toyota 50 billion yen a year, according toKoji Endo, managing director of Advanced Research Japan, aTokyo-based equity research firm.
Toyota’s second-quarter net income compared with a profitof 139.8 billion yen a year earlier, it said in today’sstatement. The maker of Prius hybrid cars was projected to posta 23.2 billion yen loss, based on the median of five analystestimates compiled by Bloomberg.
The carmaker narrowed its full-year operating loss forecastto 350 billion yen from 750 billion yen.
Toyota may boost sales in Japan for the first time in fiveyears as the government offers rebates of as much as 250,000 yento buyers of fuel-efficient vehicles. The company’s third-generation Prius gasoline-electric hybrid was the country’sbest-selling passenger car model for five straight monthsthrough September.
Hybrid Models
President Toyoda plans to introduce four new gasoline-electric hybrid models in Japan and three overseas by the end ofMarch.
In the U.S., traditionally Toyota’s biggest market, salesrose 6.4 percent in August, buoyed by the government’s “cashfor clunkers” rebate program. September sales dropped 13percent after the program ended, bringing the tally for thefirst nine months of the year down 28 percent.
A U.S. Labor Department report tomorrow will probably showthat the jobless rate rose to 9.9 percent in October, a 26-yearhigh, while payrolls fell by 175,000 workers, according to themedian forecast of economists surveyed by Bloomberg.
To contact the reporter on this story:Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net
Last Updated: November 5, 2009 01:36 ESTSource: Bloomberg
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