Toyota Looking Bullish on Growth

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Toyota Motor Corp. posted a smaller than expected 3.5-percent increase in operating income for the third-quarter operating profit but analysts clearly were willing to give the Japanese giant the benefit of the doubt.

Nevertheless, the giant automaker’s executives also said they still expected to come close to matching the $16 billion operating profit Toyota posted last March when it closed the books on fiscal 2004.

Toyota also raised its sales forecast for the full year to March 31 by 70,000 units to 7.29 million for the group, which Daihatsu Motor Co. and truck-maker Hino Motors Ltd.

Meanwhile, both the company’s revenues and profits grew during the third quarter. Revenue hit almost $46 billion and operating income topped $4.2 billion, while net income was roughly $2.9 billion.

“During the third quarter, we exceeded our calendar-year sales targets in every region,” said Ryuii Araki, TMC executive vice president. “At the same time, we were able to offset the negative effects of currency fluctuations and other factors by implementing initiatives aimed at further growth, including cost reduction and improved operational efforts,” he said.

“With strong sales momentum world wide, we will continue to work hard to achieve last year’s profit levels,” said Arkai, who also noted the company is continuing to gain market share in key markets.

In the company’s home market of Japan, Toyota ’s market share was a record 44.4 percent. Toyota also posted record sales in Europe and North America during the same period. Araki said. Operating income in North America, where the company posted record market share of 12.2 percent, declined slightly during the Oct.-Dec. period of 2004, compared to the same period in 2003.

Sales in all other regions grew by 20 percent during the quarter.

Meanwhile, Toyota continues to invest in new plants and vehicle technology, in pursuit of stated goal of capturing 15 percent of the global auto market some time with in the next decade. “Overall, our spending on investments for future growth has been high, and that will likely continue into 2006,” Senior Managing Director Takeshi Suzuki told a news conference.

Only last week, the company opened its new truck plant in Tijuana, Mexico, and the plant is expected to export not only cargo beds but as many as 30,000 finished compact pickup trucks to the United States. At the same time, the company is also building a new plant in Texas and expanding factories in Alabama and West Virginia and is studying the possibility of adding another production site in North America.

Toyota starts up a new plant in the Czech Republic while building more cars in China, Argentina, and South Africa . A sixth North American car plant is also being built, and outside analysts have suggested Toyota’s biggest challenge making sure the rapid expansion doesn’t compromise its famous vehicle quality or dilute its famously engrained culture of seeking out opportunities to cut waste.

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