Toyota recovers its crown as the world’s top-selling carmaker, but for how long?

Article by Christian Andrei, on August 6, 2012

It didn’t take Toyota Motor Corp. long to stage a comeback and recapture its crown as the top-selling automaker in the world. The past year has been difficult for the company as it struggled from the impact of natural disasters in 2011. But now, Toyota is expecting to raise its 2012 production and sales forecasts.

Toyota is set to announce its largest quarterly operating profit in four years, signifying a full recovery from the disruption in supply chains that was the result of the Thailand floods and the Japan earthquake. Analysts said that the challenge now is on whether the outsized sales gains Toyota saw in its biggest markets could be sustained in the upcoming quarters.

Toyota is expected to report an operating profit of 314.1 billion yen ($4 billion) on average for the quarter that ends in June, compared with a loss in the previous year, according to analysts surveyed by Thomson Reuters I/B/E/S.

In addition, they predict a 5.7% operating margin, a sharp increase from the 1.9% margin posted for the fiscal year ended in March. This would mean that Toyota would fall below the performance of its peak year that ended March 2008, before the worldwide financial crisis affected sales and quality and safety problems compelled it to recall about 19 million vehicles beginning in 2009.

Kurt Sanger, auto analyst at Deutsche Securities, said that the automaker is coping with the various challenges but the yen continues to be “a phenomenal problem for them."

Toyota has set a target to continue producing 3 million vehicles a year in Japan, making it more exposed to the stronger yen than its direct competitors. About 40% of Toyota’s cars and trucks are built in Japan. On the other hand, domestic rivals Nissan and Honda only produce around 25% in Japan. [source: Reuters]

Topics: toyota, sales

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