Toyota Motor Corp., the world’s largest carmaker, may trail Honda Motor Co. in profit for a third straight year as lingering consumer concerns over recalls crimp its recovery.
Net income may more than double to 490 billion yen ($6 billion) in the 12 months ending March 31, compared with a previous forecast of 350 billion yen, the Toyota City, Japan- based company said in a statement yesterday. Last week, Tokyo- based Honda raised its forecast 6 percent to 530 billion yen, reported Bloomberg.
Even as a U.S. economic recovery and rising demand in emerging markets help Toyota, the company expects to earn less than a third of the record 1.7 trillion yen it made in the year ended March 2008. While the enduring impact of record recalls damp President Akio Toyoda’s efforts to engineer a rebound, Honda has been boosted by its motorcycle business and greater resilience to the stronger Japanese yen.
“Toyota is still carrying the negative impact from the recalls and is struggling with its profitability compared with other carmakers,” said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo.
Toyota was the only major carmaker to post a decline in U.S. sales last year as the overall market gained 11 percent. The company’s deliveries fell 0.4 percent to 1.76 million vehicles, while Honda’s sales rose 6.9 percent to 1.23 million.
Separately, the U.S. government said it found no link between electronics in Toyota’s vehicles and sudden acceleration incidents after a 10-month study. NASA, the U.S. space agency, was asked by the National Highway Traffic Safety Administration to conduct a technical review that found only mechanical errors as the likely cause of unintended acceleration.
Toyota shares rose 4.6 percent to 3,650 yen as of the 11 a.m. trading break in Tokyo.
Honda is getting closer to where its profitability level was before the 2008 financial crisis triggered by the collapse of Lehman Brothers Holdings Inc., Honda Chief Financial Officer Yoichi Hojo said last week. Its U.S. factory utilization rate is back to about 85 percent compared with 75 percent a year ago, he said.
To insulate itself from fluctuating yen-dollar rates, Honda also relies on North American-built autos for a higher proportion of its U.S. sales. In 2010, 87 percent of the vehicles Honda sold in North America came from plants in the U.S., Canada and Mexico, while 67 percent of Toyota’s U.S. sales were of models built in North America, according to data from the carmakers.
Ford Motor Co., the most profitable U.S. carmaker, earned $6.56 billion in the year ended in December.
Volkswagen AG, the biggest European automaker, may post 2010 profit of 4.85 billion euros ($6.6 billion), based on the average of eight analyst estimates compiled by Bloomberg in the past 28 days. Daimler AG may have earned 4.84 billion euros, according to the average of nine estimates.
Nissan Motor Co., Japan’s second-biggest automaker, posts its quarterly results later today.
For the fiscal third quarter, Toyota’s net income fell 39 percent from a year earlier to 93.6 billion yen. Profit dropped after the Japanese government ended a subsidy program for fuel- efficient models in September and the yen reached its highest level since 1995 in November.
“Toyota lags behind others in terms of profit recovery, but with the U.S. market coming back, the company will produce and sell more vehicles, which will help it cut costs,” said Kohei Takahashi, an analyst at JPMorgan Chase & Co. in Tokyo.
Toyota revised its outlook for the yen’s exchange rate against the dollar to 86 yen from 85 yen. The yen traded at 82.36 to the dollar as of 11:25 a.m. in Tokyo after reaching a 15-year high of 80.22 on Nov. 1.
Every 1-yen appreciation of Japan’s currency against the dollar erodes about 30 billion yen from Toyota’s earnings, according to the carmaker. Honda, which produces more than 70 percent of its vehicles outside Japan, loses 17 billion yen for each 1-yen gain in the currency.
Auto sales in Japan may benefit from new models including the updated Vitz compact and Lexus CT200h hybrid, Toyota said yesterday.
The company said sales in Asia, excluding Japan, rose 21 percent to 335,000 units in the quarter ended Dec. 31. In China, sales may rise to 900,000 vehicles this year from 840,000 last year, Toyota said yesterday.
The maker of Highlander sport-utility vehicles now expects to sell 7.48 million autos globally in the year ending March 31, up from its earlier forecast of 7.41 million.
Toyota cut selling, general and administrative costs by 12 percent in the third quarter. The automaker also lowered full- year capital expenditure, depreciation and research and development spending targets, Senior Managing Director Takahiko Ijichi told reporters in Tokyo yesterday.
“Our cost-cutting efforts are moving faster than expected,” he said.
The carmaker has continued to issue recalls for various defects as it seeks to regain customer trust. The company said Jan. 26 it would repair 1.7 million vehicles globally because of faults in fuel pipes and pumps, pressure sensors and spare-tire carriers. The announcement came after the carmaker recalled more than 8 million vehicles for problems linked to unintended acceleration.
