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Profits Slide – But Toyota Claims Recovery on Track

Make boosts full-year sales, earnings forecast.

by on Feb.07, 2012

Toyota hopes to boost demand for products like the Corolla during the fourth quarter.

Toyota profits slid another 13.5% for the latest quarter reflecting the maker’s ongoing production problems and the impact of lopsided exchange rates – but the Japanese giant also indicated that it has begun a long-awaited recovery that should see profits begun turning upward during the final three months of the Japanese fiscal year.

Toyota profits slipped to 80.9 billion, or $1.05 billion, for the October – December quarter, down from $93.6 billion yen the year before.  Sales for the quarter were up 4.1%, to 4.865 trillion yen, or $63.4 billion, hinting at the maker’s slow return to normal production levels after the hammering it took as a result of the March 11 Japanese earthquake and tsunami and subsequent flooding in Thailand.

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Toyota Managing Director Takashi Ijichi indicated, during a conference call, that sales continue returning back to normal during the current quarter.  Meanwhile, “company-wide profit improving efforts” will help trim about 60 billion yen in costs during the fourth quarter.  As a result, Toyota raised its profit forecast for the full year to 200 billion yen, or $2.6 billion, up from 180 billion yen, or $2.3 billion, in an earlier forecast.

“We feel confident the foundation of our business is now stronger,” he said.

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Toyota Won’t Abandon Japan

CEO Toyoda will maintain “illogical” Japanese production base.

by on Jul.15, 2011

It may be "illogical," but Toyota CEO Akio Toyoda won't give up on building cars like Prius in Japan.

As his nation struggles to rebuild after the devastating earthquake and tsunami of March 11, Toyota Motor Co. CEO Akio Toyoda says he won’t contribute to Japan‘s problems by shifting more automotive production offshore – even as it contributes billions of yen in losses to the world’s largest automaker.

There had been mounting fears in the troubled Asian nation – but hope among many investors – that the Toyota family heir would use the crisis to justify a shift away from the home market reliance that has made it difficult to resume production after the disaster.  Japan’s largest automaker, Toyota has traditionally positioned its hefty Japanese production base as a matter of civic responsibility, though in the weeks after March 11, Toyoda admitted it was becoming increasingly “illogical.”

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Toyota controls roughly half of the home market, but its production base there is far more than what’s needed simply to supply Japanese vehicle needs.  Competitors like Nissan have steadily fled offshore – Nissan CEO Carlos Ghosn closing four Japanese plants since taking over that company’s reins in 1999.  But while most of Toyota’s growth has been fueled by new plants in places like North America, Europe and China, the maker has been reluctant to walk away from its original production base.

“Toyota is a company that was born and raised in Japan and we can’t just abandon it because the environment is difficult,” said the grandson of the company founder, insisting the automaker would “grit our teeth and protect Japanese manufacturing.”

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Toyota Extends Production Cuts at U.S. Plants

Will continue operating at reduced speed at least through June.

by on Apr.20, 2011

Toyota extends production cuts outside Japan.

Still struggling with a shortage of Japanese-made parts, Toyota says it will extend production cuts at its North American “transplant” factories until at least June – but says the move will not result in any layoffs.

Like its Japanese competitors, Toyota has been struggling to get its operations back up to speed in the wake of the March 11th earthquake and tsunami – and subsequent nuclear crisis – that devastated Japan. The maker’s home assembly plants were down for a month, resulting in the loss of over a quarter million vehicles of production.

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But the cuts have been extended to other parts of the world, where Toyota’s factories depend on at least some Japanese-made components.

Shortly after the March disaster, Toyota suspended overtime work at its U.S. operations. It now says that from this Friday through June 3 North American plants will operate at half capacity on Tuesdays, Wednesdays and Thursdays and shut down entirely on Mondays and Fridays.

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