Despite massive recalls that dented its safety image, Toyota Motor Corp. said Tuesday it logged a ¥147.5 billion group operating profit for the business year that ended in March, reversing the ¥461 billion loss recorded a year earlier.
It posted ¥209.5 billion in group net profit, compared with a loss of ¥436.9 billion in the 2008 business year, when the global financial crisis hit and car sales in the United States and Europe tanked. Group sales slipped 7.7 percent to ¥19 trillion from ¥20.5 trillion.
The steep rebound in profit — the first in two years — comes mostly as a result of cost-cutting efforts.
The safety woes mainly affected sales in the United States and Europe, but incentives in some regions helped shore up sales, limiting the fall in revenue.
“It was a year of being constantly on alert due to the series of recall matters, which caused concerns,” President Akio Toyoda said. “The severe conditions will likely continue, but I believe there is light far away amid the storm.”
Toyota now expects profits to grow in the current business year to next March. It forecasts a ¥280 billion group operating profit and ¥310 billion net profit on ¥19 trillion in sales.
The company said it will focus on next-generation environmentally friendly cars by improving technology for hybrids and expanding its lineup. Also, it will gear up sales in fast-growing economies, particularly China and India.
Profit for the last business year mainly came from production cost cuts amounting to ¥520 billion, as well as ¥470 billion worth of reductions in fixed daily costs, including for labor, research and development, the company said.
Toyota said costs linked to its spate of worldwide recalls — ¥170 billion to ¥180 billion for the business year — were within expectations.
But concerns about potential massive recalls over accelerator defects continue.
The earnings results came a day after U.S. Transportation Secretary Ray LaHood hinted at a news conference at Toyota’s headquarters in Aichi Prefecture that more fines could be imposed if needed.
Last month, Toyota agreed to pay a record $16.4 million U.S. government fine for delaying a January recall over defective accelerator pedals.
Meanwhile, the U.S. Department of Transportation’s National Highway Traffic Safety Administration said in a statement issued Monday in Washington that it has opened an investigation into whether Toyota in 2005 notified the agency of a steering relay rod safety defect within five business days of learning of the defect’s existence, as required by law.
“We will fully cooperate with the investigation,” Toyoda said at the news conference.