Gojirra99

May 10, 10:10 AM EDT



By YURI KAGEYAMA
AP Business Writer


TOKYO (AP) -- Toyota's profit in the January-March quarter jumped 39 percent as the world's No. 2 automaker marked its sixth straight record fiscal year of booming sales, the company said Wednesday.

Toyota Motor Corp. recorded a net profit of 404.1 billion yen ($3.6 billion) in the final quarter of fiscal 2005, up from 290.7 billion yen in the same quarter the previous year.

Quarterly sales totaled 5.75 trillion yen ($51.6 billion), up 18 percent from 4.88 trillion yen a year ago. The surge in sales means Toyota is now just slightly behind General Motors Corp. as the world's largest automaker in terms of revenue. GM last month reported its sales rose to a record $52.2 billion in its latest quarter from $45.8 billion in the first quarter a year ago.

With sales booming around the world, Toyota is on pace to overtake General Motors Corp. as the world's biggest automaker. Its models' reputation for good mileage has helped Toyota ****** U.S. market share away from GM and Ford Motor Co. at a time when gas prices are soaring.

Toyota said vehicle sales rose in every major region of the world except for Japan, where overall auto sales have stagnated lately. Toyota sold 7.97 million vehicles around the world in fiscal 2005, up from 7.4 million vehicles the previous year.

Toyota is banking on the success of fuel-efficient hybrid technology, which allows cars to switch between a gasoline engine and electric motor, to drive its global growth.

The company is due to roll out its hybrid Camry this summer, and it could be the vehicle that shows whether hybrids will join the mainstream.

In the United States, Toyota and its Lexus luxury division accounted for seven out of 10 hybrid sales in 2005, between the top-selling Toyota Prius, at 53 percent of all U.S. hybrid sales, and the Lexus RX400h crossover, at 9.7 percent.

Toyota said it expects to sell 8.45 million vehicles globally in the fiscal year ending March 2007, up 6 percent from fiscal 2005.

Detroit-based General Motors earned $445 million in the January-March period after a revision from an initial report of a loss for accounting changes. GM, which doesn't give yearly vehicle sales forecasts, sold 9.17 million vehicles last year.

While Toyota is on a roll around the world, analysts warn some risks may be ahead, such as the weaker dollar, which tends to erode the overseas earnings of giant Japanese exporters when converted into yen.

And indeed, Toyota, which in the past had not given group income forecasts, said profits are expected to dip 4.5 percent for the fiscal year through March 2007 to 1.31 trillion yen ($11.7 billion) on 22.3 trillion yen ($200 billion) sales, up 6 percent.

"The big question is whether Toyota will be able to maintain good profits efficiently while selling more cars," said Koichi Sugimoto, auto analyst at Nomura Securities Co. in Tokyo.

In fiscal 2005, a favorable exchange rate added 300 billion yen ($2.7 billion) to its books, while cost reduction efforts another 130 billion yen ($1.2 billion).

The company is forecasting the dollar to trade at 110 yen this fiscal year. It traded at about 113 yen in the fiscal year just ended.

Toyota's profit for the fiscal year through March rose 17 percent to 1.37 trillion yen ($12.3 billion) from 1.17 trillion yen the previous year, the fourth straight record income for Toyota. Sales for the year climbed 13 percent to 21 trillion yen ($188 billion), the sixth straight record.

Just about the only recent trouble Toyota has encountered is a $190 million sexual harassment lawsuit filed last week against the president and CEO of Toyota Motor North America, Hidetaka Otaka.

Toyota said Tuesday that Otaka, 65, has stepped down, although he claims he is innocent of the charges brought by Sayaka Kobayashi, his former personal assistant, who claimed he made repeated unwanted sexual advances.

Toyota President Katsuaki Watanabe said the case shouldn't have much impact on the company's business results.

In another shuffle, Toyota said Wednesday that Chairman Hiroshi Okuda, who oversaw Toyota's rise in recent years as a global automaker, will step down to senior adviser while staying on as member of the board.

Fujio Cho, former president and now vice chairman, who helped Toyota establish itself as a member of corporate America, replaces Okuda as chairman, the company said in a statement.

The move is unlikely to have a major impact on Toyota's strategy as Watanabe, who replaced Cho, has inherited the global growth strategy that was forged under Cho and Okuda before him.

Toyota is increasing production in various regions, such as a plant in Texas that begins production this year, as well as in China, where Toyota later this month rolls out its first Camry - the best-selling car in the U.S. - to meet auto demand there that's ballooning. Production expansions are also in the works in Canada, Thailand, Mexico, Russia and South Africa.

Toyota sold 2.6 million cars in North America, up from 2.3 million the previous year, and 880,000 vehicles in the rest of Asia, up from 833,000.

Toyota shares, which have gained 67 percent over the past year, dipped 0.7 percent to 6,680 yen ($60) in Tokyo shortly before earnings were disclosed.

© 2006 The Associated Press.

rominl

iTrader: (4)

damn i am floored, 39% increase, how can they keep on increasing on sales so much every quarter..... insane....

spwolf

would be more if we had more cars to sell... They need to up the production FAST!

PhilipMSPT

iTrader: (5)

Maybe. Because demand exceeds supply, Toyota can "control" prices and gain lots of profit. Especially for the Prius, which is not the biggest profit maker, it's best to keep the supply low as it still creates a "gas-efficient halo" for Toyota.

Let Toyota use the profit for R&D. I can't wait for the next gen 100 mpg Prius...

rominl

iTrader: (4)

i wonder what GM is thinking

LexFather

Amazing. They did it even with
1. Hybrids that are not profitable
2. Class leading or near class leading features.
3. Top build quality
4. Sharing parts but not to the extent that every car has the same platform and engine.

Amazing

rominl

iTrader: (4)

and i think the word "reliability" has brought them tremendous amount of business too

seriously, you go out there and talk to people and mention about toyota, most of the time they say "yes it's reliable" as their first impressive

Gojirra99

With record fiscal-year earnings, Japanese giant is stepping up pressure on rivals on all fronts.

Christine Tierney / The Detroit News

The world's richest automaker keeps getting richer.

Rising vehicle sales and stingy cost controls fueled a surge last year in Toyota Motor Corp.'s profit to a record $12.1 billion -- or nearly double General Motors Corp.'s peak annual earnings.

Favorable currency trends contributed to a 17 percent rise in profit at the Japanese automaker, which generates more than half of its income in North America.

In April, Toyota muscled into the Big Three when it overtook DaimlerChrysler AG for the first time to become the third-largest seller of vehicles in the United States after GM and Ford Motor.

In the fiscal year ended March 31, Toyota increased vehicle sales in every major region of the world except its sluggish home market.

The company, now ranked second in global sales, is closing in on GM with plans to produce more than 8.5 million vehicles this year, including the Daihatsu and Hino brands. Last year, GM sold 9.17 million vehicles worldwide.

"I don't know when we'll pass GM," Toyota Chief Executive Katsuaki Watanabe said in Tokyo. "We're not thinking about other companies. We're just trying to meet our own growth goals."

But the cash-rich Japanese rival is stepping up the pressure on its rivals on all fronts, with plans to increase research spending more than 10 percent this year to $8.4 billion. It will also boost its already-high capital spending.

"Because of their success, they can put down poker chips on a lot of different areas and technologies," said Michael Robinet, vice president of CSM Worldwide, a Farmington Hills forecasting firm.

"That will protect them," he said, if consumer tastes shift from one type of technology, such as gas-electric hybrids, to another.

"Toyota's not tied to one region or segment. They're well diversified," Robinet said. "That's the level that essentially every vehicle manufacturer wants to get to."

Toyota faces big challenges, however, as it pursues its goal to capture 15 percent of the global market. That would put it slightly ahead of where GM is now.

GM has been the world's largest automaker for 75 years, but it is downsizing in North America to restore profits. The automaker lost $10.6 billion last year. GM earnings peaked at $6.9 billion 1995.

But Toyota is engaged in a tricky balancing act as it strives to maintain its sterling reputation for quality while rapidly expanding production overseas.

In the year begun on April 1, it expects to build roughly as many vehicles overseas as it does in Japan. It is building or expanding plants and training new workers in China, Thailand, South Africa, Russia and France.

In North America, Toyota is about to open a new factory in San Antonio, Texas, that will produce full-size Tundra pickup trucks. It also plans to build a second assembly plant in Ontario.

Toyota expects to increase its presence in the big U.S. pickup segment by offering its first full-size truck. But analysts note that Honda Motor Co. and Nissan Motor Corp. are reducing truck output in North America because high gas prices have hurt demand.

In a conference call with analysts, Toyota Senior Managing Director Takeshi Suzuki said the company had no intention of scaling back the Texas plant's planned capacity to produce 200,000 trucks a year.

"But we'll observe market conditions closely and we may respond by taking a judicious approach," he said. "We have time before the startup of the plant."

Toyota is counting on the success of big vehicles such as the Tundra and new Lexus LS ultra-high-tech flagship sedan to complement growing sales of small cars in developing economies.

Toyota achieved an operating profit margin of 9 percent last year -- exceeding the profitability of most luxury automakers.

In the current fiscal year, Toyota aims to increase vehicle sales in North America, its most lucrative market, by 9.5 percent.

The New York Times News Service contributed to this report.