Toyota May Beat Profit Forecasts

“The carmaker is boosting production every month,” said Takashi Aoki, a fund manager at Tokyo-based Mizuho Asset Management Co. “Toyota is going to do whatever it takes to boost volume sales and to recover as much market share as possible.”

The maker of the Camry sedan said it plans to roll out 19 new models in the U.S. as Toyota, outsold by General Motors Co. and Volkswagen AG last year, prepares to sell a record number of vehicles worldwide during 2012. Its resurgence signals GM, VW and Hyundai Motor Co. may cede back some of the market share they gained in 2011.

Analysts are even more optimistic than the Toyota City- based carmaker. Before the company raised its full-year net income forecast to 200 billion yen ($2.6 billion), the average of 20 estimates compiled by Bloomberg projected 285.4 billion yen. As recently as January, the average estimate was above 300 billion yen, even after the carmaker had slashed its projection to 180 billion yen in December.

Toyota rose as much as 1.8 percent to 30 euros in Frankfurt trading. The stock closed unchanged at 2,986 yen in Tokyo before the company reported earnings and raised its projections.

Return of Confidence

For the third quarter ended Dec. 31, net income fell 14 percent to 80.9 billion yen, while revenue increased 4.1 percent to 4.87 trillion yen, Toyota said.

The return of Toyota’s confidence compares with 2011, when the company’s business was hit by Japan’s deadly earthquake and tsunami, floods in the Southeast Asian manufacturing hub of Thailand and a yen that advanced to postwar records.

Toyota’s earnings revisions are also a contrast to consumer-electronics makers struggling to recover. In the past month, Sony Corp. more than doubled its annual loss forecast, while Panasonic Corp. and Sharp Corp. predicted record losses. Honda Motor Co., Japan’s third-largest carmaker, last week lowered its full-year earnings prediction.

The recovery in 2012 — described by Honda President Takanobu Ito as the year of the “complete rebound” — is under way in the U.S. and Japan, Toyota’s two biggest markets. Sales in the U.S. rose 7.5 percent in January, led by the flagship Camry midsize sedan’s 56 percent jump, according to Autodata. At home, deliveries of Toyota passenger vehicles rose 46 percent last month, the biggest gain since April 2010, according to the Japan Automobile Dealers Association.

Market Share Gains

Toyota may regain market share from GM in the U.S. this year, according to a Bloomberg survey of five analysts. The Japanese carmaker may capture 13.8 percent of the market this year, compared with 12.9 percent last year, while GM may drop to 19 percent from 19.6 percent last year, according to the survey.

Toyota today raised its forecast for sales for the fiscal year to 7.41 million vehicles, compared with the previous projection for 7.38 million. Toyota on Feb. 3 forecast sales, including those of Hino Motors Ltd. and Daihatsu Motor Co., from January to December will climb to a record 9.58 million vehicles.

Jim Lentz, head of sales in the U.S., Toyota’s biggest market, said in Detroit last month that sales of the Prius would climb more than 60 percent in the country to a record and exceed 220,000 vehicles, fueled by the new smaller version of the hybrid hatchback.

Government Aid

In Japan, Toyota’s second-largest market, the government began waiving some taxes and offering rebates for certified low- emission vehicles in December to help the domestic industry. The Japan Automobile Manufacturers Association said Dec. 20 that incentives will help domestic demand increase by 900,000 vehicles in 2012 after last year’s record drop.

During 2011, sales at Toyota — excluding those at Daihatsu and Hino — shrank 6.7 percent in the U.S. and declined 23 percent in Japan, contributing to Toyota losing its top spot in global annual vehicle sales to GM. Deliveries in China slowed to about 4 percent, the slowest growth since it officially entered the market in 2002, according to Shiori Hashimoto, a spokeswoman for the carmaker. Honda last week forecast a 12 percent drop in revenue.

GM, Ford

GM, Ford Motor Co. and Chrysler Group LLC have benefited, with all three adding market share last year in the U.S. for the first time since 1988. Hyundai and Kia Motors Corp. also gained at the expense of their disaster-stricken rivals, more than doubling the U.S. share they held in 2005 last year.

Toyota is counting on the revamped Camry, which went on sale from October in the U.S., and new versions of the Prius in 2012 to regain market share. Toyota will also begin selling its new 86 sports coupe in Japan from April 6 as part of President Akio Toyoda’s push to widen its appeal.

The competition isn’t standing still. Ford is preparing to sell a remodeled Fusion midsize sedan and GM plans a revamped Chevrolet Malibu this year. Hyundai is planning a Brazilian version of the Santa Fe sport-utility vehicle and smaller affiliate Kia is preparing to introduce the K9 midsize sedan.

“U.S. automakers are back with improved financial situations and strong products, and the Koreans have very good products as well,” said Takahiko Ijichi, a Toyota senior managing officer responsible for accounting. “Competition is definitely tough.”

Still, Toyota may be underestimating the magnitude of the rebound this year.

“Their new forecast only reflects the sales boost they’re expecting from Japan, so I think we can expect a little more,” said Yuuki Sakurai, chief executive officer at Fukoku Capital Management Inc. in Tokyo, which manages the equivalent of $7.4 billion.





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