24
Apr
10

Recalls? Toyota Still Showing Profit

NEWS
Recalls? Toyota Still Showing Profit

Saturday, April 24, 2010

••• Results from Toyota Motor to be released next month are expected to show the auto giant returning to profit in the year to March, despite a massive recall scandal, news reports say.

The Japanese automaker is expected to post a group operating profit of up to 50 billion yen ($531.75 million), reversing a 461 billion yen ($4.90 billion) operating loss for the previous year, the Nikkei business daily said on Saturday.

The uptick is mainly due to cost-cutting and a weak yen, which offset the costs of the global recalls, the daily said.

The company has recalled around 10 million vehicles worldwide since late last year due to accelerator and brake defects, but nevertheless expected to see a ‘good earnings situation’ a Toyota executive told Kyodo News.

Toyota had earlier forecast an operating loss of 20 billion yen ($212.7 million) for the year to the end of March.

Sales were expected to show a five percent fall to 7.2 million units, Nikkei said. The better-than-expected sales were partially due to strong demand for its new Prius hybrid car in Japan.

A Toyota spokesman was not immediately available to comment on the report.

The firm is due to announce its earnings results in early May.

On Monday the company agreed to pay a $16.4 million fine, the largest for an automaker in the United States, for hiding for at least four months accelerator pedal defects blamed in more than 50 U.S. deaths.

Toyota faces at least 97 U.S. lawsuits seeking damages for injury or death linked to sudden acceleration and 138 class action lawsuits from American customers suing to recoup losses in the resale value of Toyota vehicles.

The company overtook General Motors in 2008 as the world’s top automaker, but the safety recalls raised questions over whether it sacrificed quality to become number one.
• Source(s): Toyota Motor Corporation & Nikkei Inc.
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