Toyota Motor Corp. on Wednesday reported a 22 percent rise in group pretax profit to 972.2 billion yen for the business period that ended in March, the highest ever posted by a Japanese company.
Toyota attributed its record-setting performance, achieved despite the slowing Japanese and U.S. economies, to brisk sales in domestic and overseas markets and efforts to reduce costs.
Strong sales of new vehicles, including the luxury sedan Celsio, helped compensate for losses derived from the yen’s appreciation against the euro and the dollar in the early part of the 2000 business year, officials of the nation’s top automaker said.
Toyota’s share of the domestic vehicle market, excluding minivehicles, reached a dominant 43.1 percent.
Consolidated sales also set a record high for the firm, rising 4.2 percent to 13.4 trillion yen. The figure covers sales by Toyota’s 445 group firms.
Operating profit rose 12.1 percent to 870.1 billion yen, while net profit expanded 15.9 percent to 471.2 billion yen.
In a news conference at the Nagoya Stock Exchange, President Fujio Cho said he was satisfied with the results, especially the improved profitability of its affiliated component makers.
Cho said Toyota is making steady progress in its cost-cutting program unveiled in July, under which the automaker is seeking to shave annual production costs by 1 trillion yen, or roughly 30 percent.
“Cost cutback is the only method that will enable us to win global competition,” Cho said, adding, “We will likely clear cutback goal figures by March next year.”
Cho also said Toyota continued to profit from increased overseas production, noting that Toyota began producing the Yaris, known as Vitz in Japan, at a new plant in France and expanded production in North America.
He said he aims to make the automaker a leading global company in the 21st century through “cost reduction and maximization of the total power of the Toyota Group.”
Toyota Chairman Hiroshi Okuda, speaking at a news conference as chairman of the Japan Federation of Employers’ Associations (Nikkeiren), said the record-
high earnings are “only a passing point for Toyota” and that the automaker would continue to seek bigger profits.
On a parent basis, Toyota’s sales jumped 6.7 percent to 7.93 trillion yen, while pretax profit rose 14.8 percent to 621.7 billion yen.
The automaker’s unconsolidated operating profit reached 506.8 billion yen, up 3 percent, while net profit rose 1.3 percent to 333.5 billion yen.
For the current business year that ends in March 2002, Toyota forecasts a parent-only pretax profit of 630 billion yen and sales of 8 trillion yen.
Meanwhile, Toyota said that it will cut back on group-based capital outlays on new equipment and production lines, as well as on research and development, by 8.2 percent in fiscal 2001 to 790 billion yen.
But the company said it expects domestic sales to rise 4 percent during the same period to 1.89 million vehicles.
Exports themselves are likely to dip 7.3 percent to 1.58 million units with the company relocating production to overseas production bases, like a new factory in France where it began manufacturing the Yaris in fiscal 2000.
Peugeot to be cut off
Toyota Motor Corp. said Wednesday it plans to discontinue buying diesel engines from French automaker PSA Peugeot Citroen this fall.
Toyota currently purchases diesel engines from Peugeot for some of its Corolla models sold in Europe.
With Toyota itself planning to produce diesel engines in Europe, “We have no intention to procure them from Peugeot, BMW AG (of Germany) or any other automakers,” Toyota Executive Vice President Tadaaki Jagawa told a news conference.
Jagawa also said it will be difficult for Toyota to bring its European operations into the black at least through the 2002 business year.
Despite its record-setting sales and earnings, Toyota incurred an operating loss of 23 billion yen in Europe, mainly because of the startup costs for its new plant in France, which began making the Yaris in January. The falling euro also hurt earnings.
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