Toyota forecast profit will rise 48 percent this fiscal year

Article by Christian Andrei, on August 25, 2010

As Toyota Motor Corp. recovers from the daunting recalls in North America, it predicts that profit will increase by 48% this fiscal year. Aside from expecting a recovery in North America (its biggest market), the company also forecasts that sales will increase in Japan as well as in other parts of Asia.

In a statement, Toyota said that for the fiscal year that ended last March, net income may rise to 310 billion yen ($3.35 billion) from 209 billion yen a year earlier.

In April, its US sales increased by 24% as incentives raised the demand for its Corolla and Prius models and offset the impact of recalls of over 8 million vehicles worldwide for flaws linked to unintended acceleration. Toyota also forecasts that its North American sales will rise by 1.5% this fiscal year to 2.13 million vehicles.

When it comes to Toyota's earnings for this year, "North America is the only market that matters," according to Gentoku Kiyokawa, a fund manager in Tokyo at Fortis Investments, which bought Toyota shares last February.

He added that based on the latest sales figures, the recalls aren't causing much of a problem. As sales in the car industry fell 21% to 10.4 million units (its lowest since 1982), Toyota's US sales fell by 20% in 2009. Soon after the company launched discounts and other incentives across its lineup, sales in the US increased by 41% in March.

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