Toyota back in black as auto sales recover
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Toyota cruised back to profit in the latest quarter as the world's top car maker cut costs and hitched a ride on the global auto sales recovery while fighting to salvage its reputation for quality.
But the auto maker's top executive and analysts alike said Toyota is still far from a full recovery while another potential blow to its image looms after United States federal authorities launched a fresh investigation into a steering recall.
Toyota Motor Corp yesterday said January-March profit totaled 112 billion yen (US$1.2 billion), compared with a 766 billion yen loss the year before.
Quarterly revenue jumped to 5.28 trillion yen from 3.54 trillion yen a year earlier, when purchases of cars and other vehicles were slumping amid the global financial crisis.
Toyota, which makes the Prius hybrid, is forecasting even better results for the fiscal year through March 2011, projecting annual profit to rise 48 percent to 310 billion yen.
Whether the world's biggest auto maker can recover rests in part on salvaging its reputation after recalling more than 8 million cars worldwide for faulty gas pedals, a braking software glitch, faulty floor mats and other defects.
On Monday, the US National Highway Traffic Safety Administration said it is carrying out a new investigation into Toyota to see whether it had stalled on a recall for a steering defect in 2005 in the US. It had carried out recalls for similar problems in Japan in 2004.
Toyota has already paid a maximum fine of US$16.4 million for dallying on a recall for acceleration problems, and NHTSA could slap it with a fine of up to that amount again over the steering issue.
US Transportation Secretary Ray LaHood, who is in Japan to visit Toyota and inspect high-speed trains, said on Monday that additional fines may be levied against Toyota.
"There's still a long way to go before a full recovery," said author Masaaki Sato, who has written books on the history of Toyota. "It barely managed to return to the black."
Sato said the results show a Toyota that's weakened compared with its heyday just a few years ago when its profits were booming, its models were topping consumer surveys and annual global sales were approaching 10 million vehicles.
President Akio Toyoda acknowledged that his job was similar to steering a ship in the middle of a storm. He said the ship was sailing toward what appeared to be sunny skies as employees were working together "in one spirit."
