Toyota Auto Output Soars Again Despite Recall

Toyota Auto Output Soars Again Despite Recall

 

 

TOKYO (Dow Jones)--Toyota Motor Corp. (7203.TO) nearly doubled its global production in March, as a low basis of comparison from last year canceled out the debilitating effects of worldwide vehicle recalls.

The world's biggest auto maker by sales said Monday it boosted global production in the latest reporting month by 96.7% to 773,297 vehicles, following a 82.7% gain in February. March's steep gain was attributed to the comparison from the year-earlier month, when the company was adjusting to a plunge in demand in the wake of the global financial crisis.

Domestic production in March shot up 115.2% on year to 347,281 vehicles, marking the fifth straight month of gains. Toyota also boosted overseas output by 83.8% to 426,016 vehicles, extending the monthly streak of on-year gains to the eighth month in a row.

The figures are not surprising, said Chibagin Asset Management analyst Yoshihiro Okumura, noting that Toyota has been adjusting its production based on demand.

He said government subsidies on fuel-efficient cars may help sales for a while, but that production is likely to suffer when the subsidies expire in the second half of this fiscal year. "Just because it had strong production in March doesn't mean (the figures) will continue to rise," he said.

The world's biggest auto maker by sales is striving to regain customer trust by fixing problems with more than 8.5 million vehicles in China, the U.S., Europe, Japan and other regions, and by enhancing quality control. The $2 billion recall cost, plus potential litigation bills, will likely squeeze earnings.

Last week, Moody's Investors Service cut the credit rating on Toyota's long-term debt by a notch to match its lowest-ever level, saying the global recall saga raises questions about profitability until 2012 at the earliest.

But in a slight ray of hope, Toyota has reportedly managed to turn a group operating profit for the business year ended in March. In the previous fiscal year, it suffered an operating loss of Y461.01 billion.

The Nikkei reported in its Saturday morning edition that Toyota may log an operating profit of as high as Y50 billion. This would beat its forecast for a Y20 billion loss, as cost reductions and a weaker yen have helped stave off another year in the red.

The report helped push Toyota shares up on the Tokyo Stock Exchange, with the issue closing 3.4% higher at Y3,690.

Toyota said in a statement that the figures in the report were "not something that we have formally announced," adding that it would release its earnings results on May 11.

For the full business year, meanwhile, Toyota said its global production grew 2.5% to 7.279 million.

Toyota reduced domestic production by 5.5% to 3.207 million for the full business year, while raising overseas output by 9.7% to 4.072 million vehicles.

Other auto makers released improved output results for the latest reporting month, on the back of a recovery in demand.

Honda Motor Co. (7267.TO) raised its global output in March by 61.9% to 349,425 vehicles compared with the same month a year earlier. Its domestic production was up 52.1% to 93,771 vehicles, marking for the third straight month of on-year gain.

For the full business year, its global production declined 7.5% to 3.305 million, although its output in Asia and China set fiscal-year records. Its full year domestic output fell 21.5% to 901,775 vehicles.

Nissan Motor Co.'s (7201.TO) global production in March shot up 85.2% to 318,827 vehicles on year in March. Of the total, its domestic output gained 61.4% to 99,903 vehicles.

For the full business year, Nissan's worldwide production rose 7.8% to 3.146 million vehicles. Meanwhile, it reduced domestic output by 2.4% to 1.025 million vehicles.