05 Nov 2009
Nov. 5 (Bloomberg) -- Toyota Motor Corp., the world's largest carmaker, narrowed its full-year net loss forecast for a second time after government stimulus measures revived vehicle demand in the U.S. and Asia.The company expects a net loss of 200 billion yen ($2.2 billion) in the year ending March 31, compared with an earlier forecast for a 450 billion yen loss, it said in a statement today. The company posted an unexpected second-quarter profit of 21.8 billion yen.
Toyota joined Nissan Motor Co. in predicting a smaller loss after government tax cuts and subsidies spurred global car demand. President Akio Toyoda, who said last month the company was one step from "irrelevance or death," has ordered the carmaker's first plant closure and an exit from Formula One racing to cut costs.
"Toyota's sales are picking up more than initially thought," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments Ltd. in Tokyo, which manages 3.4 trillion yen. "Like Honda and Nissan, Toyota is benefiting from government stimulus programs."
The Toyota City, Japan-based maker of Corolla compact cars raised its full-year revenue forecast to 18 trillion yen from 16.8 trillion yen, as it boosted vehicle sales estimates for Asia, Japan and North America.
Global Sales
Toyota's improved outlook follows Honda Motor Co. almost tripling its profit estimate last week. Nissan Motor Co. narrowed its loss forecast, citing better-than-expected sales in China. Hyundai Motor Co., South Korea's biggest automaker, posted a record profit in the quarter on surging U.S. and China sales and a weaker won.
The carmaker raised its global vehicle sales forecast to 7.03 million, from its August forecast of 6.6 million. The company sold 7.57 million units last fiscal year.
"Demand-stimulating measures by governments worldwide have contributed to our revised targets for the full fiscal year," Executive Vice President Yoichiro Ichimaru told reporters in Tokyo. "We continued to make improvements in the reduction of fixed costs."
Toyota fell 0.8 percent to close at 3,580 yen in Tokyo trading, before the earnings announcement. The shares have gained 23 percent this year.
Plant Closure
The carmaker said in August it would shut its New United Motor Manufacturing Inc. assembly plant in Fremont, California, the first factory closure in Toyota's 72-year history. A collapse in U.S. auto sales to the lowest level since 1976 left Toyota struggling to keep North American plants running at capacity.
The withdrawal from Formula One from next season, announced yesterday, may save Toyota 50 billion yen a year, according to Koji Endo, managing director of Advanced Research Japan, a Tokyo-based equity research firm.
Toyota's second-quarter net income compared with a profit of 139.8 billion yen a year earlier, it said in today's statement. The maker of Prius hybrid cars was projected to post a 23.2 billion yen loss, based on the median of five analyst estimates compiled by Bloomberg.
The carmaker narrowed its full-year operating loss forecast to 350 billion yen from 750 billion yen.
Toyota may boost sales in Japan for the first time in five years as the government offers rebates of as much as 250,000 yen to buyers of fuel-efficient vehicles. The company's third- generation Prius gasoline-electric hybrid was the country's best-selling passenger car model for five straight months through September.
Hybrid Models
President Toyoda plans to introduce four new gasoline- electric hybrid models in Japan and three overseas by the end of March.
In the U.S., traditionally Toyota's biggest market, sales rose 6.4 percent in August, buoyed by the government's "cash for clunkers" rebate program. September sales dropped 13 percent after the program ended, bringing the tally for the first nine months of the year down 28 percent.
A U.S. Labor Department report tomorrow will probably show that the jobless rate rose to 9.9 percent in October, a 26-year high, while payrolls fell by 175,000 workers, according to the median forecast of economists surveyed by Bloomberg.
