Toyota Advances After Camry Maker Raises Earnings Forecasts: Tokyo Mover

Toyota Motor Corp., Asia’s largest carmaker, climbed to the highest in six months in Tokyo trading after the company raised its profit forecast.

Toyota climbed as much as 3.7 percent to 3,095 yen, the highest intraday level since Aug. 4, as of 9:14 a.m. The company raised its net income, operating profit and revenue forecasts for the year ending March 31 after the close of trading in Tokyo yesterday.

Toyota, outsold by General Motors Co. and Volkswagen AG last year, plans to roll out 19 new models in the U.S. en route to a record number of global vehicle sales in 2012. Its resurgence signals GM, VW and Hyundai Motor Co. may cede back to the maker of the Camry sedan some of the market share they gained in 2011.

“The carmaker is boosting production every month,” said Takashi Aoki, a fund manager at Tokyo-based Mizuho Asset Management Co. “Toyota is going to do whatever it takes to boost volume sales and to recover as much market share as possible.”

Analysts are even more optimistic than the Toyota City, Japan-based carmaker. Before the company raised its fiscal-year net income forecast to 200 billion yen ($2.6 billion) yesterday, the average of 20 estimates compiled by Bloomberg projected 285.4 billion yen. As recently as January, the average estimate was above 300 billion yen, even after the carmaker trimmed its projection to 180 billion yen in December.

The company’s profit peaked at 1.72 trillion yen in the year ended March 2008.

Less European Exposure

Toyota’s lower reliance on European sales compared with GM and Volkswagen also works in its favor this year if auto sales there plunge due to the region’s economic turmoil, according to Alan Baum, principal of Baum & Associates, a provider of automobile-industry analysis in West Bloomfield, Michigan.

“They have a paradoxical advantage, since they are not particularly strong in Europe,” Baum said in an interview yesterday. “To the extent Europe underperforms, they’re OK with that.”

For the third quarter ended Dec. 31, net income fell 14 percent to 80.9 billion yen, while revenue increased 4.1 percent to 4.87 trillion yen, Toyota said.

The return of Toyota’s confidence compares with 2011, when the company’s business was hit by Japan’s deadly earthquake and tsunami, floods in the Southeast Asian manufacturing hub of Thailand and a yen that advanced to postwar records.

Toyota’s earnings revisions are also a contrast to Japanese consumer-electronics makers struggling to recover. In the past month, Sony Corp. more than doubled its annual loss forecast, while Panasonic Corp. and Sharp Corp. predicted record losses.

Honda Motor Co., Japan’s third-largest carmaker, last week lowered its full-year earnings prediction.

Market Share Gains

The recovery in 2012 -- described by Honda President Takanobu Ito as the year of the “complete rebound” -- is under way in the U.S. and Japan, Toyota’s two biggest markets. Sales in the U.S. rose 7.5 percent in January, led by the Camry mid- size sedan’s 56 percent jump. At home, deliveries of Toyota passenger vehicles rose 46 percent last month, the biggest gain since April 2010, according to the Japan Automobile Dealers Association.

January’s U.S. gains came even as Toyota pared incentives by 13 percent per vehicle in the month, according to Autodata, which is based in Woodcliff Lake, New Jersey. Industrywide discounts decreased by 5.6 percent.

Toyota may regain market share from GM in the U.S. this year, according to a Bloomberg survey of five analysts. The Japanese carmaker may capture 13.8 percent of the market this year, compared with 12.9 percent last year, while GM may drop to 19 percent from 19.6 percent last year, according to the survey.

Toyota yesterday raised its forecast for sales for the fiscal year to 7.41 million vehicles, compared with the previous projection for 7.38 million. Toyota on Feb. 3 forecast sales, including those of Hino Motors Ltd. and Daihatsu Motor Co., from January to December will climb to a record 9.58 million vehicles.

GM, VW

GM deliveries last year rose 7.6 percent to 9 million vehicles, while VV’s increased 13 percent to 8.16 million.

Jim Lentz, Toyota’s head of sales in the U.S., its biggest market, said in Detroit last month that sales of the Prius would climb more than 60 percent in the country to a record and exceed 220,000 vehicles, fueled by the new smaller version of the hybrid hatchback.

In Japan, Toyota’s second-largest market, the government began waiving some taxes and offering rebates for certified low- emission vehicles in December to help the domestic industry. The Japan Automobile Manufacturers Association said Dec. 20 that incentives will help domestic demand increase by 900,000 vehicles in 2012 after last year’s record drop.

2011 Setbacks

During 2011, sales at Toyota -- excluding those at Daihatsu and Hino -- shrank 23 percent in Japan and declined 6.7 percent in the U.S., contributing to Toyota losing its top spot in global annual vehicle sales to GM. Growth of deliveries in China slowed to about 4 percent, the slowest since Toyota officially entered the market in 2002, according to Shiori Hashimoto, a company spokeswoman. Honda last week forecast a 12 percent drop in revenue.

GM, Ford Motor Co. and Chrysler Group LLC have benefited, with all three adding market share last year in the U.S. for the first time since 1988. Hyundai and Kia Motors Corp. also gained at the expense of their disaster-stricken rivals, more than doubling the U.S. share they held in 2005 last year.

Toyota is counting on the revamped Camry, which went on sale in October in the U.S., and new versions of the Prius to regain market share and boost U.S. deliveries 16 percent this year to 1.9 million. Toyota will also begin selling its new 86 sports coupe in Japan from April 6 as part of President Akio Toyoda’s push to widen its appeal.

Improved Competition

The competition isn’t standing still. Ford is preparing to sell a redesigned Fusion mid-size sedan and GM plans a revamped Chevrolet Malibu this year. Hyundai is planning a Brazilian version of the Santa Fe sport-utility vehicle and smaller affiliate Kia is preparing to introduce the K9 mid-size sedan.

“U.S. automakers are back with improved financial situations and strong products, and the Koreans have very good products as well,” said Takahiko Ijichi, a Toyota senior managing officer responsible for accounting. “Competition is definitely tough.”

Still, Toyota may be underestimating the magnitude of the rebound this year.

“Their new forecast only reflects the sales boost they’re expecting from Japan, so I think we can expect a little more,” said Yuuki Sakurai, chief executive officer at Fukoku Capital Management Inc. in Tokyo, which manages the equivalent of $7.4 billion.

To contact the reporters on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net; Masatsugu Horie in Osaka at mhorie3@bloomberg.net; Yuki Hagiwara in Tokyo at yhagiwara1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.