Toyota Outsells GM for Fifth Quarter Amid Yen-Led Recovery

Toyota Motor Corp. (7203) outsold all automakers for a fifth straight quarter as the yen’s depreciation sharpens the Japanese company’s edge over General Motors Co. (GM) and Volkswagen AG. (VOW)

Worldwide sales at Toyota, including those of subsidiaries Hino Motors Ltd. (7205) and Daihatsu Motor Co. (7262), reached 2.43 million units in the January-to-March period, spokeswoman Shino Yamada said today. That compares with GM’s 2.36 million units and VW’s 2.27 million vehicles reported earlier this month.

The Japanese company has been projecting since late December that sales will climb to almost 10 million units -- a milestone no automaker has ever breached -- in 2013. Since then, business conditions have improved further as the yen extended its depreciation against all major currencies, bolstering Toyota’s earnings prospects and raising its market value by more than $50 billion this year alone.

“Toyota will probably keep the top spot this year,” said Kentaro Hayashi, an analyst at Tachibana Securities Co. “But the gap may narrow because GM is planning to launch many new models.”

In 2008, Toyota ended GM’s 77-year reign as the world’s largest automaker, holding on to the top annual sales spot until 2011, when it surrendered the title after production was disrupted by natural disasters in Japan and Thailand.

Photographer: Valentin Flauraud/Bloomberg

Toyota Motor forecast a smaller annual profit than analysts estimated as the world’s biggest carmaker faces fiercer competition in the U.S. and falling demand in China. Close

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Photographer: Valentin Flauraud/Bloomberg

Toyota Motor forecast a smaller annual profit than analysts estimated as the world’s biggest carmaker faces fiercer competition in the U.S. and falling demand in China.

Sales rebounded in 2012, allowing the Japanese automaker to deliver 9.75 million units and regain its global No. 1 title as the recession receded, the carmaker added products and was spared from disruptions from natural disasters.

Rebounding Earnings

Earnings are rebounding too. Net income in the year ended March probably tripled to 908 billion yen and will climb 52 percent this fiscal year, according to the average analyst estimate compiled by Bloomberg.

Behind that recovery is the yen, which has tumbled 19 percent against the dollar since mid-November, when it became clear Shinzo Abe would become prime minister.

“The new government is very speedy and aggressive in their actions,” Toyota President Akio Toyoda, speaking as chairman of the Japan Automobile Manufacturers Association, said last month. “With the moves in the foreign exchange markets stabilizing, there is no doubt a sense that we’re beginning to see a silver lining.”

U.S. Gains

Among its regions, Toyota’s sales in the U.S., its biggest overseas market, increased 8.7 percent last quarter to 529,444 units, according to industry researcher Autodata Corp. While the gain helped the carmaker’s share of the U.S. market expand to 14.4 percent from 14.1 percent, the gap between GM and Toyota’s market share widened 0.2 percentage points, according to the Woodcliff Lake, New Jersey-based researcher.

Chevrolet sales helped GM’s first-quarter sales in its home market increase 9.3 percent to 664,963 units. After its U.S. market share slipped to an 88-year-low last year, the carmaker is boosting its efforts to bring out about 20 new vehicles in the country this year.

Still, Toyota’s overall deliveries slipped during the first quarter, led by a slump in its home market. Sales in Japan fell 13 percent to 650,651 units after a government subsidy for purchases of fuel-efficient cars expired in September, Toyota said.

To revive domestic sales, “there is an urgent need to invoke appropriate tax system reforms and policy initiatives,” said Takaki Nakanishi, a Tokyo-based auto analyst at Bank of America Merrill Lynch said in a report dated April 17.

The Japan Automobile Manufacturers Association expects domestic sales to fall 12 percent this year.

China Slump

While Toyota has said it doesn’t expect sales in China to fully recover before autumn, this year’s sales growth will also hinge on a recovery there. The Japanese carmaker recorded its first annual sales decline last year in China since at least 2002 and had to push back plans to make the country its third million-unit market after a territorial dispute triggered a consumer backlash.

“Our original expectation was for sales to come back in half a year, but now our plan is to push harder after our new product introductions in the fall,” Hiroji Onishi, Toyota’s China head, said in Shanghai April 21 referring to deliveries in China.

Toyota’s sales -- excluding Daihatsu and Hino -- in the world’s biggest car market fell 13 percent last quarter, spokesman Ryo Sakai said.

In Europe, quarterly sales of Toyota and Lexus cars fell 10 percent, Sakai said. The region’s industrywide sales fell 9.7 percent to 3.1 million cars in the same period, after annual deliveries dropped for a fifth consecutive year in 2012 on a recession stemming from the European sovereign-debt crisis, according to the European Automobile Manufacturers’ Association.

Volkswagen, based in Wolfsburg, Germany, reported a 5.9 percent sales decline in the region in the first quarter.

-- Editors: Young-Sam Cho, Frank Longid

To contact the reporter on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net;

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

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