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August 5, 2009

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Home » Business » Auto

Toyota loss not as bad as forecast

By Yuri Kageyama | August 5, 2009, Wednesday | Print Edition

TOYOTA Motor Corp reported a smaller-than-expected 77.82 billion yen (US$819 million) quarterly loss and expects less red ink for the full year even as the world's top auto maker battles plunging sales and a strong yen.

The maker of the Corolla subcompact and Lexus luxury models said yesterday it expects a 450 billion yen loss for the fiscal year through March 2010, better than the 550 billion yen loss initially projected.

The result for the April-June quarter underlines that Toyota is getting some traction from aggressive cost cutting. Analysts surveyed by Thomson Reuters had forecast a fiscal first quarter loss of 210 billion yen.

Toyota, which dethroned General Motors Corp as the world's top selling auto maker in 2008, raised its global vehicle sales forecast for the fiscal year by 100,000 to 6.6 million vehicles.

The increase reflected improved sales in Japan, partly because of government measures to boost the sale of environmentally friendly cars.

The better forecast is still markedly below the 7.57 million vehicles Toyota sold worldwide for the fiscal year ended March, showing how far Toyota has to go to stop the flow of red ink, now into its third straight quarter.

Toyota sold 1.4 million vehicles around the world during the quarter, a decrease of 785,000 vehicles from a year earlier, reflecting poorer performance in almost all regions.

Other Japanese auto makers have also reported better-than-expected earnings, with No. 2 Honda continuing to stay in the black, bucking expectations for losses.

Analysts say Toyota, because of its bigger size, may need longer for a full recovery. Tatsuo Yoshida, auto analyst at UBS Securities Japan, said a solid recovery can come only when the global economy starts improving and people start buying cars again.

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