Akio ToyodaEnlarge Photo
Detroit's Big Three may have grabbed most of this week's headlines, but that doesn't mean that the rest of the world's automakers have been sitting on their hands. One story that isn't getting much play is the fact that Toyota Motor Company -- which posted its first-ever loss last fiscal year -- returned to profitability last quarter.
Although the company's financials weren't quite as impressive as those Ford released on Monday, the ¥21.8 billion ($242 million) profit Toyota realized in July, August, and September 2009 marks a welcome break from the losses Toyota posted in the three previous quarters. Of course, that ¥21.8 billion figure pales in comparison to the ¥139.8 billion profit Toyota racked up during the same quarter of 2008, but it does imply that the company is on the mend.
How long and steep Toyota's road to recovery may be, however, is a matter for debate. Toyota credits government incentives, like the U.S. Cash-for-Clunkers initiative, for improvements in global sales. While some governments continue to underwrite such plans, many others like the U.S. have brought them to a screeching halt; in such cases, sales have slowed dramatically.
In addition to iffy sales volume, Toyota is facing a number of new challenges: the company has pulled out of Formula One racing; it's the subject of a serious safety investigation in the U.S. involving floor mats; and the strong yen is diminishing the company's profits from other parts of the world when converted into Toyota's home currency.
Despite all those troubles, Toyota has upped its expectations for the fiscal year. It's still planning to post a loss of ¥200 billion ($2.2 billion), but as terrible as that sounds, it's an improvement from the ¥450 billion ($5 billion) had predicted beforehand. Furthermore, growing sales in Japan and other parts of Asia have led Toyota's analysts to remain optimistic, and they've now raised the company's global sales projections from 6.6 million vehicles to 7.03 million. If nothing else, it'll be interesting to see where the roller coaster ends when Toyota closes out its fiscal year next March