Toyota reported that it expects profit for the current year to more than double to ¥760 billion, even as income for the fiscal year that ended in March tumbled. The company has seen an uneven road to recovery after the company posted a historic loss shortly after the global economic crisis began. The company has been languishing far below heights hit by the company in 2008, when the company earned a record ¥1.72 trillion ($21.5 billion). Toyota is the world’s second-largest automaker by vehicle sales, after General Motors.
The reasons for the company’s stagnation are both of its own creation and beyond its control. Toyota has struggled to grow and its rebound after the economic crisis was greatly hampered by a recall crisis. An upswing in the yen is weighing on Toyota’s profits and has made manufacturing much more expensive.
The auto maker said that net income had fallen 31% for the 12 months through March to ¥283.6 billion. Natural and nuclear disasters in Japan and flooding in Thailand wreaked havoc on production lines. The drop in income was largely attributed to the impact of those disasters and the strong Japanese currency.
In the January-March quarter, profit more than quadrupled to ¥121 billion, compared with the same quarter a year earlier. If the projections are met, it would be Toyota’s best annual performance since the 2009 plunge. However, the reported forecast fell short of a ¥817.7 billion average predicted by polled analysts.
The company has been successful in beating its own estimates on bringing factories back online after the disasters. Toyota has raced to fix supply lines damaged by the tsunami and ramp up production. It may be difficult for Toyota to recover fully without shifting more of its production out of Japan.
The company plans to bring an aggressive new model lineup to major markets like the United States and Japan. It believes that this will help boost profits to ¥760 billion in the year through March 2013. The company also expects sales in emerging markets to grow at a healthy pace. Toyota is the maker of the Corolla compact and the Prius gas-electric hybrid.