{"id":32550,"date":"2010-11-05T10:01:35","date_gmt":"2010-11-05T14:01:35","guid":{"rendered":"http:\/\/www.thedetroitbureau.com\/?p=32550"},"modified":"2010-11-05T11:15:42","modified_gmt":"2010-11-05T15:15:42","slug":"toyota-warns-it-may-have-to-move-production-out-of-japan","status":"publish","type":"post","link":"https:\/\/thedetroitbureau.com\/2010\/11\/toyota-warns-it-may-have-to-move-production-out-of-japan\/","title":{"rendered":"Toyota Warns It May Have To Move Production Out Of Japan."},"content":{"rendered":"
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It's becoming increasingly difficult to keep building vehicles, like the Prius, in Japan, warns Toyota.<\/figcaption><\/figure>\n

Toyota Motor Co. did markedly better during the first half of its fiscal year, a senior company official disclosed Friday, but while strong sales in key markets, such as Asia will help it deliver better earnings than expected for the current year, the rising value of the yen and its ongoing recall problems will result in a plunge in earnings during the second half of 2010.<\/p>\n

Income for the full fiscal year, which ends March 31, 2011, is now expected to rise to 350 billion yen ($4.31 billion), up from an earlier forecast of 340 billion yen.<\/p>\n

That projected improvement comes \u201cdespite the influence of the strong yen,\u201d which has been a serious problem for the maker in dealing with its largest foreign market, the United States, said Toyota Managing Officer Takuo Sasaki, speaking through an interpreter, during a teleconference to discuss the company\u2019s latest quarterly earnings.<\/p>\n

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News Now! Click For A Free Subscription!<\/figcaption><\/figure>\n

Looking ahead, Toyota now anticipates an exchange rate of 85 yen to the dollar, down from an earlier forecast of 90.\u00a0 But on November 1, the exchange rate fell to its lowest level in more than 15 years, the yen plunging to 80.22 against the dollar.<\/p>\n

\u201cIf we assume the (exchange rate) remains at 80 yen to the dollar, the environment will be extremely tough,\u201d cautioned Sasaki, and would raise questions about how long the company can continue producing vehicles in Japan.<\/p>\n

\u201cCurrently we are striving very hard to make sure we can remain profitable\u201d on Japanese-made products, he said, through extensive cost-reduction efforts.\u00a0 The process may require may require the development of products specifically geared towards building in Japan.<\/p>\n

But if that doesn\u2019t work, Sasaki warned, \u201cWe will be compelled to consider other alternatives,\u201d which, while unspoken, seems to suggest the need to shift vehicle production outside the home market.<\/p>\n

The first half of the current fiscal year was buoyed by a variety of factors, despite the worsening exchange rate situation.\u00a0 Net revenues rose 15.5%, to 9.68 trillion yen, while operating income reversed last year\u2019s 136.9 billion yen loss to reach 323.1 billion yen.<\/p>\n

For the July-September quarter, profits rose to 98.7 billion yen, or $1.2 billion.\u00a0 That was up from 21.8 billion yen during the second quarter of 2009, but lower than industry analysts had predicted, signaling problems ahead.<\/p>\n

Indeed, the numbers to follow won\u2019t look so good, Toyota warned, with second-half profits expected to drop by as much as 77%, to 61 billion yen. By comparison, the maker posted earnings of 265 billion yen during the first half of the 2009 fiscal year.<\/p>\n

In a little more than 12 months, Toyota has had to recall more than 10 million vehicles worldwide, the vast majority of them for a pair of problems that could cause unintended acceleration problems.\u00a0 The impact of those two recalls alone could cost the maker more than $2 billion, several analysts have forecast \u2013 more if the courts rule against Toyota in a series of lawsuits now working through the U.S. courts.<\/p>\n

To underscore the ongoing recall problem, Toyota preceded the first-half earnings report with the announcement that another 135,600 vehicles sold in Europe and Japan will have to be recalled.\u00a0 None of the products were sold in North America.<\/p>\n

But the exchange rate issue is a broader and potentially longer-lasting issue.\u00a0 It is also one that faces the maker\u2019s Japanese competitors, as well.\u00a0 But, like Toyota, both Honda and Nissan are predicting better full-year earnings than initially estimated, largely the result of booming sales in China.<\/p>\n

The good news from Asia stands in sharp contrast to its problems in North America, where vehicle sales are now expected to decline for the year, from 2.098 million to 2.09 million \u2013 and down from an early estimate of 2.17 million.\u00a0 Significantly, October sales fell 4% in the U.S., even while most of Toyota\u2019s key competitors, including U.S., Korean and Japanese brands, rose by double-digit levels.<\/p>\n","protected":false},"excerpt":{"rendered":"

Profits for the year will be up, says Toyota – but that masks a huge plunge expected for the second half. Blame lopsided exchange rates which, TheDetroitBureau.com reports, could force Toyota to pull vehicle production out of Japan.<\/p>\n","protected":false},"author":2,"featured_media":31039,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[8],"tags":[],"make":[],"post-state":[],"category_old":[151],"acf":[],"_links":{"self":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/32550"}],"collection":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/comments?post=32550"}],"version-history":[{"count":0,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/posts\/32550\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media\/31039"}],"wp:attachment":[{"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/media?parent=32550"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/categories?post=32550"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/tags?post=32550"},{"taxonomy":"make","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/make?post=32550"},{"taxonomy":"post-state","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/post-state?post=32550"},{"taxonomy":"category_old","embeddable":true,"href":"https:\/\/thedetroitbureau.com\/wp-json\/wp\/v2\/category_old?post=32550"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}