Toyota expecting slower '07 growth
North American sales will be flat, affecting earnings and revenue, the automaker said.
TOKYO - Toyota expects that flat sales in North America - where higher gas prices, a housing slump, and a slowing economy have tempered consumer spending - will slow growth in its overall revenue and profit this year after double-digit gains last year.
Besides the anticipated sales slowdown, Toyota Motor Corp. officials said yesterday that investments in new plants to boost production and the cost of research to develop new models would depress its profit expansion for the fiscal year through March 2008.
Japan's biggest automaker has also been spending on quality controls after suffering a surge in recalls that analysts say may be a byproduct of the automaker's recent aggressive growth efforts.
It expects a 0.4 percent rise in profit this year, its smallest improvement since its profit slipped in the fiscal year ended March 2002, on a 4.4 percent growth in sales.
By contrast, Toyota's profit rose 20 percent on a 14 percent rise in sales in the fiscal year that ended in March.
The glum forecasts came as Toyota - which beat U.S.-based General Motors Corp. in worldwide vehicle production and sales in the January-to-March period for the first time - reported that its group profit rose 9 percent, to 440.1 billion yen ($3.67 billion) in its fourth fiscal quarter from 404 billion yen a year earlier. Sales rose 10 percent to 6.3 trillion yen ($52.5 billion).
Analysts say it is just a matter of time before Toyota overtakes GM to become the world's No. 1 automaker - a title that technically hinges on worldwide vehicle production for an entire year.
Toyota's sales have risen as soaring gas prices have boosted the appeal of its models, which are known worldwide for fuel efficiency. They include gas-and-electric hybrids such as the Prius.
Toyota is projecting a profit for the fiscal year through March 2008 of 1.65 trillion yen ($13.8 billion) on sales of 25 trillion yen ($209 billion).
Toyota also expects to sell 8.89 million vehicles, up 4 percent from the 8.5 million sold in the fiscal year just ended.
Despite the forecast for limited profit growth for the current fiscal year, Toyota is faring better than U.S. rivals.
Detroit-based GM, the world's largest automaker over the last 76 years, has experienced a shrinkage of its market share in the United States, and it has announced a restructuring plan to stem billions in losses it racked up in 2005 and 2006. Earlier this month, GM reported a $62 million profit in its first quarter.