On a Roll, Toyota Chalks Up Record Profit, Vehicle Sales

General Toyota Vehicles Images Ahead Of Earnings
Kiyoshi Ota/Bloomberg via Getty Images

TOKYO -- Toyota chalked up a record annual profit and sales above 10 million vehicles for the first time, but forecast a slower year ahead Thursday, as the momentum from a weak yen fades.

Expenses such as the $1.2 billion penalty it paid in a settlement with the U.S. Justice Department earlier this year for hiding information about defects in its cars dented its profit for January-March quarter, according to Toyota.

Toyota Motor (TM), the world's top automaker, is forecasting a 1.78 trillion yen ($17.5 billion) profit for the fiscal year through March 2015.

That's lower than what the company recorded for the fiscal year just ended, when its profit almost doubled to a record 1.82 trillion yen ($17.9 billion) from 962 billion yen the previous year.

Annual sales jumped 16 percent to 25.69 trillion yen ($252 billion), helped by a weak yen which aids Japanese exporters and thanks to growth in the U.S., Europe, Japan and the rest of Asia. The yen perk is likely transitory as the currency isn't expected to weaken indefinitely.

Toyota believes Japan sales were inflated in recent months as consumers rushed to buy ahead of a tax increase that kicked in April 1, so that such growth won't hold up during the current fiscal year.

Still, the company is on a roll.

The maker of the Prius hybrid, Lexus luxury model and Camry sedan became the first automaker to sell more than 10 million vehicles in a 12-month period, with sales totaling 10.13 million vehicles around the world for the fiscal year ended March. It also expects to surpass the 10-million milestone for the current calendar year.

It is expecting solid growth to continue, hoping to sell 10.25 million vehicles globally for the fiscal year through March 2015.

Highlighting the Japanese automaker's ambitions, it noted that extra costs including research and development expenses were a factor in reducing its January-March profit to 297 billion yen ($2.9 billion) from 313.9 billion yen a year earlier.

Quarterly sales rose 12.5 percent to 6.57 trillion yen ($64.5 billion).

It also said costs related to closing its auto plant in Australia cut into profits.

Toyota has bounced back from a massive recall crisis that began in late 2009, which tarnished its reputation.

But there was a moment of deja vu last month when it announced a recall of 6.4 million vehicles globally, for a variety of problems spanning nearly 30 models in Japan, North America, Europe and other places. Some vehicles were recalled for more than one problem.

Toyota has been trying to put the recall mess behind it, with the $1.2 billion settlement it reached with the U.S. Justice Department. It earlier paid fines of more than $66 million for delays in reporting unintended acceleration problems.

The National Highway Traffic Safety Administration never found defects in electronics or software in Toyota cars, which had been targeted as a possible cause.

Even more of a threat than recalls could be the fierce competition Toyota faces in key global markets from Volkswagen of Germany and Hyundai of South Korea, as well as U.S. automakers such as General Motors (GM). and Ford Motor (F).

Toyota sold fewer vehicles in North American for January-March at 567,000 vehicles compared to the same period the previous year at 603,000 vehicles.

But it is making up for such losses in other markets.

A weak yen also helped earnings at Honda Motor (HMC), which last week said that January-March net profit totaled 170.5 billion yen ($1.67 billion), up from 75.7 billion yen the year before.

Honda sold nearly 1.2 million vehicles worldwide during the quarter, also helped by demand ahead of the Japanese tax rise. It is forecasting a 4 percent rise in annual profit to 595 billion yen ($5.8 billion).

Although the dollar soared to about 100 yen during the past fiscal year from about 80 yen the fiscal year before that, it's unlikely to keep rising at that pace, to 120 yen, for instance.

Nissan Motor, allied with Renault SA of France, releases results Monday.

Toyota Recalls 6.4m Vehicles

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keep buying the jap junk........idiots.........toyota-lets go places-lets go back to the dealership for a recall.......

May 09 2014 at 1:30 PM Report abuse rate up rate down Reply

I've had three recalls on my 2006 Tacoma, with another recall on it's way. We all compare Toyota "recalls" at work: that rusty frame thing is for real. A lady at work just had to have the entire frame changed on her most recent recall of a 2001 Tacoma.
I complaint to the dealer when I go in, and their attitude I get is "what do you care, we fix them for free?", and "what are we supposed to do if something is wrong?". ANSWERS: Q1- You are wasting my time with these endless recalls; Q2- Try building a vehicle that doesn't have so many defects. I'll never buy another Toyota product, I can tell you that. They should have issued a re-call for the power window mechanism that fell apart in my driver's side door, when I had about 30,000 miles on the vehicle. That one cost $200 to fix at the local auto body shop (the screws and bolts were laying in the bottom of the door!).

May 08 2014 at 11:18 PM Report abuse rate up rate down Reply

Let me tell you this as I stay neutral on the matter and a tow truck driver, I have picked up more than almost twice as much Toyotas than GM, Ford, and Hondas that has broken down. Also we have to be careful when we strap them down on the tow trucks from bending the frames. The frames send to rust more than others too. I wouldn't own one.

May 08 2014 at 8:51 AM Report abuse rate up rate down Reply