Toyota trims annual loss forecasts on Prius, but stays deep in red+

TOKYO, Aug. 4 Kyodo -
Toyota Motor Corp. on Tuesday trimmed its full-year loss forecasts for the
current business year as domestic sales began to pick up on booming demand for
its best-selling Prius hybrid on the back of government stimulus measures for
fuel-efficient cars.

But in contrast with rivals Honda Motor Co. and Nissan Motor Co., Toyota
remained deeply in the red for a third consecutive quarter with a group
operating loss of 194.86 billion yen as demand continued to fall sharply in
overseas markets amid a lingering global economic downturn.
For the whole of fiscal 2009 through next March, the world's largest automaker
now anticipates an operating loss of 750 billion yen -- still its worst-ever on
record -- on sales of 16.8 trillion yen. It had earlier projected an operating
loss of 850 billion yen on sales of 16.5 trillion yen.
Toyota is also expecting a group net loss of 450 billion yen in the fiscal
year, smaller than the 550 billion yen loss projected in May, thanks also to
aggressive cost-cutting efforts and inventory reductions.
The automaker, which has Daihatsu Motor Co. and Hino Motors Ltd. under its
wing, said it expects to sell 6.6 million units globally, slightly up from an
earlier forecast of 6.5 million units as it raised its full-year sales
projection in Japan.
Takahiko Ijichi, Toyota's senior managing director, told reporters that the
automaker is likely to see a rise in domestic sales in fiscal 2009 for the
first time in five years.
The company kept its annual global production target intact at 6.3 million
units, but Ichiji said Toyota will likely announce a revision soon.
Toyota has received about 250,000 orders for the Prius gasoline-electric hybrid
since it went on sale in Japan in May, causing a more than six-month delay in
delivery due to a lack of production capacity for lithium ion batteries.
Other hybrid models have also benefited with the new hybrid-only version of the
luxury Lexus sedan enjoying strong orders, Ichiji said.
''Sales, particularly in Japan, will begin to improve by the latter half of
this business year as the impact from the tax breaks and subsidies for eco-cars
begin to seep in,'' said Tsuyoshi Mochimaru, an auto analyst at Barclays
Capital Japan Ltd.
Mochimaru had anticipated that Toyota would report a first-quarter operating
loss of 300 billion yen and a net loss of 250 billion yen.
For the April-June quarter, Toyota logged a group net loss of 77.82 billion
yen, a drastic improvement over the loss of 765.8 billion yen booked during the
January-March quarter. It logged a profit of 353.66 billion yen a year earlier.
Group sales dropped 38.3 percent to 3.84 trillion yen as Toyota suffered
double-digit declines in all key regions including Japan, North America, Europe
and other parts of Asia. Global auto sales during the three-month period fell
35.9 percent to 1.40 million units.
''The markets are being supported by government aid measures globally,'' Ijichi
said at a press conference in Tokyo.
''But it's hard to foresee whether the slightly energized market is really
heading towards a real recovery,'' he said, citing the market uncertainty as a
reason why the company left its full-year overseas sales target unchanged.
Toyota, which logged its first group operating loss in 71 years in fiscal 2008,
has reduced its temporary workforce and cut production levels as it scrambles
to reduce 460 billion yen in fixed costs during the current business year.
Toyota President Akio Toyoda has said he wants to return the automaker to
profitability by March 2011.
''Right now, we are going to focus on cost reduction efforts,'' Ijichi said.
''But don't take Toyota's strength in 'kaizen' (improvement) for granted, we
will surely work towards returning to the black.''
Last week, Honda, Japan's second-largest automaker, revised upward its
full-year profit forecasts and remained in the black with a group net profit of
7.56 billion yen for the April-June quarter on the back of strong sales of its
Insight hybrid.
Meanwhile, No. 3 automaker Nissan saw a better-than-expected group operating
profit of 11.60 billion yen in the first quarter of fiscal 2009, due partly to
brisk sales in China. But it maintained its full-year earnings forecasts of a
net loss of 170 billion yen and an operating loss of 100 billion yen.
==Kyodo