* Q4 op profit 238.5 bln yen vs 46.1 bln yen yr-ago
* Q4 net profit 121 bln yen vs 25.4 bln yen yr-ago
* Sees 2012/13 op profit of 1 trln yen vs 355.6 bln yen
* Sees operating margin of 4.5 pct this yr vs 1.9 pct last
yr
* Toyota shares close flat ahead of earnings
By Chang-Ran Kim
TOKYO, May 9 (Reuters) – Toyota Motor Corp expects
to treble its operating profit this year to more than $12.5
billion, its highest since the global financial crisis, as
Japan’s top automaker recovers lost ground in markets from the
United States to China.
Operating profit jumped more than five-fold in January-March
to $3 billion, with all production centres back up and running
after last year’s earthquake, tsunami and Thai floods disrupted
supply chains and cost Toyota around 400,000 cars in lost output
– roughly 9 weeks worth of U.S. sales.
With robust top-line growth a given in the current year –
the company predicts operating profit of 1 trillion yen ($12.54
billion), in line with market forecasts – Toyota is looking to
squeeze further cost cuts in a battle to offset a strong yen
. Executives say they have gone back to a war on waste –
or “muda” – a key component of its vaunted production system.
At a briefing on Wednesday, Chief Financial Officer Satoshi
Ozawa noted the “huge contribution from all the (cost-cutting)
efforts we’ve been making.”
Toyota President Akio Toyoda, the 56-year-old grandson of
the automaker’s founder, said everyone in the company had worked
towards improving profitability, and “the focus on making good
cars has translated into sales volumes and profits. That in turn
is leading to investments for even better cars,” he said.
With U.S. dealerships humming again, Toyoda and his aides
have sketched out a strategy aimed at stripping costs from
everything – from production lines in Japan to Mississippi to
the years of design and engineering that go into making new cars
and parts.
The goal is to push up profit margins even as Toyota rides a
wave of recovering demand while tapping into its tradition of
incremental improvement – or “kaizen” – the corporate creed that
once made it the world’s most feared and studied manufacturer.
Toyota expects operating margins to improve this year to 4.5
percent from 1.9 percent in the year just ended. That gets it
closer to a target of a minimum 5 percent margin before 2015,
but is still short of Nissan Motor Co’s 7.1 percent
margin and 6.5 percent at Honda Motor Co, the Japanese
automaker that was slowest to recover from last year’s lost
output. South Korean rival Hyundai Motor’s operating
margin tops 10 percent.
Toyota said sales in emerging markets were in line with its
plans, including in China where January-April sales were heading
for a full-year target of 1 million vehicles.
“As we seek growth in emerging markets, a big challenge for
us in a market like China, for example, is how to speed up
product launches and come up with the right products for the
market,” Toyoda said.
HOME PRODUCTION
Despite the pain of building cars at home with the dollar
far below the 85 yen breakeven level in Japan, Toyota has
committed to build at least 3 million vehicles a year at its
domestic factories – roughly triple the output at local rivals
Nissan and Honda. Among the hurdles Toyota faces in Japan are
the strong yen, costly labour regulations, high corporate taxes
and an energy policy deadlock that has shut all Japan’s nuclear
reactors and driven up costs.
Toyota last month unveiled a new scheme aimed at slashing
development costs by more than a fifth, in part by using more
shared components. This allows automakers to cut procurement
costs on the bits customers don’t see or necessarily appreciate,
such as the metal brackets that hold seats in place.
Toyota was once considered a benchmark in this, but rivals
now look to follow Volkswagen’s lead in using a wide
range of shared parts in both its luxury Audi and mass-market
Volkswagen brands.
The Japanese firm is also renewing efforts to step up its
manufacturing efficiencies – something executives concede fell
by the wayside when the company raced to add factory lines to
meet soaring demand before the global financial crisis brought
growth to a shuddering halt.
In the United States, where its reputation for quality with
vehicles like the Camry was once unassailable, Toyota is under
pressure from Hyundai and the recovering Detroit automakers. Its
U.S. sales jumped 12 percent last month – though that’s still
nearly a fifth below April 2008 before the financial crisis.
“Toyota’s recovery will make the overall auto industry’s
competitive landscape tougher this year,” said Song Sang-hoon,
analyst at Kyobo Securities in Seoul. “For Toyota, the big risk
factors will be how much the yen could strengthen and the
outlook for the U.S. market. It has competitive models from the
Camry to the Prius and the Corolla, and how that trio of
flagship models can perform will decide its recovery pace.”
Toyota forecast current year net profit of 760 billion yen,
its best in five years.
Toyota shares, valued at more than $134 billion, have gained
more than a third since the broad market trough in
late-November, outperforming Nissan, Honda, General Motors
, Ford and VW, but lagging BMW. The main
Topix share index is up by a tenth over the same period.
Toyota closed flat on Wednesday ahead of the earnings in a
broader Topix market that fell 1.4 percent.
