Toyota Motor Corp nudged its full-year net profit forecast up to $9.7 billion, even as it put the cost of recent anti-Japanese protests and a slowing economy in China, the world's biggest autos market, at lost sales of 200,000 cars.
Sales at Toyota and its two Chinese joint ventures almost halved in September and October amid often violent protests in a dispute over ownership of islets in the East China Sea. Honda M's China car sales more than halved last month, while Nissan's fell 41%.
Toyota said on Monday the impact of the drop in sales would cost it 30 billion yen off its full-year net profit. It sold around 900,000 vehicles in China last year.
While Honda last week cut its full-year net profit forecast by a fifth to take account of the China damage, and Nissan is expected to follow suit when it releases its July-September results on Tuesday, Toyota has found room to revise its forecasts higher as it traditionally gives more conservative earnings guidance and relies less heavily on China sales.
China accounts for around 12% of Toyota's sales, compared to Nissan's 27% and Honda's 20%. The backlash in China against Japanese goods allowed Hyundai Motor and BMW to pick up market share.
Toyota increased its net profit forecast for the year to end-March to 780 billion yen, up 2.6% from its previous guidance. It said full-year operating profit would be 1.05 trillion yen, up a touch from its earlier forecast for 1 trillion yen.
July-September net profit more than trebled to 257.9 billion yen ($3.2 billion) on solid sales in North America and Southeast Asia, beating an average estimate of 228.8 billion yen from six analysts polled by Thomson Reuters I/B/E/S. A year ago, Japanese manufacturers were still reeling from the March earthquake and tsunami.
BIG IN AMERICA
In its biggest market, the United States, Toyota's sales rose 16% in October from a year ago, giving it and its Lexus luxury brand a 13.9% market share, up from 12.3%. Toyota said it hopes to sell 2 million vehicles in the United States, a market it sees growing to 14 million vehicles.
The Camry was the third-best selling vehicle in the United States in October after Ford's F-Series pickup truck and GM's Chevy Silverado, and led the mid-sized family sedan category ahead of Honda's Accord and Nissan's Altima.
Toyota and its group companies sold a total of 7.4 million vehicles worldwide in January-September, beating GM and Volkswagen to be the top selling carmaker. Toyota was the world's biggest automaker from 2008 to 2010, and could this year regain top slot after recovering from a series of crises.
Toyota on Monday trimmed its forecast for global sales in the year to end-March – excluding those at its Chinese joint ventures – to 8.75 million vehicles from a previous 8.8 million.
Shares in Toyota, valued at nearly $135 billion – almost as much as Honda, Nissan and Hyundai combined – are up by a quarter this year, easily outpacing Honda's 4.5% gain, while Nissan is flat. Ahead of Monday's results, Toyota rose 2.2% to their highest close in 6 weeks.
TIME TO CHANGE
While Toyota is again making money, profitability in its core car business is much lower than its financial services unit, which brings in just 5% of revenue, but a quarter of operating profit.
"We are changing a lot from what we were. We want to prove how we have changed through our products, and we want to ask everyone to wait a little bit more," another vice president, Mitsuhisa Kato, said in August.
One sign of change is Toyota's more controversial designs tested on recent models. For example: the "spindle grille" on some luxury Lexus models – a prominent grille pinched in the middle – gives the car a bolder, more aggressive look.
Another is the Toyota New Global Architecture (TNGA), a new framework to build better cars and cut costs by developing multiple models simultaneously to use more common parts. Shared parts mean suppliers can produce a larger number of fewer parts, cutting the unit price. The framework focuses on three platforms, each carrying 8-10 models, Toyota employees said.
The first car to be fully developed by the TNGA will be the revamped Prius for late-2014 release, followed by the subcompact Vitz/Yaris and the next generation Camry around 2016, analysts said.
