Toyota saw markedly improved results in first-quarter fiscal 2013, ended June 30, but says it is sticking with its earnings forecast from May, while moderately raising its vehicle-sales target given the uncertainty in Europe and currency fluctuations.
The Japanese auto maker reports sales of 2.269 million units worldwide in the April-June period, up 1.048 million from like-2011, reflecting its rebound from last year’s earthquake and tsunami, which sharply hampered production.
North America, where the auto maker makes the bulk of its profits, accounted for the largest sales gain, with a 387,000-unit increase from year-ago, followed by Japan’s 285,000.
Toyota posted a 59% increase in net revenue to ¥5.5 trillion ($69.9 billion). Net income surged to ¥290.3 billion ($3.69 billion) from ¥1.1 billion ($14.0 million) year-ago. Operating income also was up ¥461.1 million ($5.86 billion), with marketing and cost-reduction efforts offsetting foreign-exchange-rate losses due to the high yen.
The auto maker is adding 100,000 units to its consolidated vehicle-sales forecast from May, with Japan accounting for a 50,000 additional units and North America 30,000.
However, it is retaining its May full-year forecast, with net revenue of ¥22 trillion ($279.6 billion), operating income of ¥1 trillion ($12.7 billion) and net income of ¥760 billion ($9.7 billion).
“It is not certain whether we can continue to sustain the same profit level continuously in and after the second quarter,” Takahiko Ijichi, Toyota senior managing officer, tells analysts during a conference call this morning. He says lower-fixed costs and the soon-to-expire Japan eco-car subsidy were beneficial to Toyota’s bottom line.
But while Toyota continues to look for ways to improve gross profit per vehicle, including raising prices, it expects Europe’s deteriorating auto market and the strong yen to temper the company’s positive momentum.
Toyota believes its sales in Europe will fall by 30,000 units, ending the fiscal year with 830,000 deliveries, compared with prior-year’s 860,000. However the revised figure still represents an increase over fiscal-2012’s 798,000 and is counter to the industry trend that will see most other auto makers suffer year-on-year declines.
Ijichi says Toyota will continue to reduce capacity in Japan while boosting production overseas, particularly “in emerging countries where the sales growth is quite brisk.”
The auto maker announced two years ago a plan to limit domestic production in Japan to 3.2 million units from 3.9 million. Ijichi says the current annual output of 3.6 million units will fall to 3.4 million by the end of the year.
In North America, he foresees Toyota avoiding incentives, except in certain cases.
“We are going to introduce 19 new models to the U.S. market (this year), and therefore I believe we will be able to adequately compete without using much incentives.”
However, Ijichi notes several competitors will challenge the midsize Camry sedan this fall, and Toyota may need to be “flexible” on the use of incentives.
Despite some sales weakness in first-half 2012, Toyota’s outlook for China is positive. “In that overall market, we plan to sell about 1 million units during this calendar year,” Ijichi says.
However, Toyota has curtailed production in China where needed in the face of rising inventories, he says.
