Toyota announced strong profits for the first fiscal quarter of the year. Net profit for the April-to-June quarter increased to 290.3 billion yen ($3.71 billion), from 1.1 billion yen in the same quarter a year earlier. The number of vehicles sold nearly doubled. Toyota said it would leave its annual profit forecast unchanged at 760 billion yen on 22 trillion yen in sales.
The rapid sales growth prompted Toyota to raise its global sales target by 180,000 cars, to a record-breaking 9.76 million cars, for this year. This would be a 23% increase from 7.95 million cars sold in 2011. Toyota expects to produce 10.05 million vehicles this year, including all its trucks and light vehicles. This would make Toyota the first automaker to break through the 10-million mark. The new targets could allow Toyota to win back its standing as the world’s largest automaker.
Toyota has been leading the recovery of the Japanese auto market after a year of natural disasters and a strong yen weighing on profits. Takaki Nakanishi, an auto analyst at Bank of America Merrill Lynch in Tokyo, said, “They’re at the peak of their momentum, but for quite transient reasons. It’s not party time. Japanese automakers still face tough conditions and competition, and a slowdown is likely in the second half.” A strong yen continues to weigh on the bottom lines of all Japanese exporters.
Toyota successfully weathered the disasters of 2011, when an earthquake and tsunami wreaked havoc at car and parts factories in Japan and widespread flooding in the manufacturing hub of Thailand froze production lines. Supply chains that were severed are now up and running. The global financial crisis and huge recalls have also made the past few years difficult for Toyota. However, Toyota is fast regaining lost ground in profitable markets like the United States and Japanese government incentives on fuel-efficient cars have improved sales at home.
