Toyota, and Honda are standards for innovation, engineering, and reliability in auto industry. This is from a country that was nuked only 60 years ago.
Instead of launching tribalistic suicidal sadistic Jihad, Japanese gained trust of their occupiers. They went to basics, worked hard, and now look them.
OTOH, Pakistanis were never occupied by US (in fact US has always given us $$ for defense contracts), and still Pak youth is filled with useless anger, thanks to commie leftie and Mullahtic hate campaign.
Toyota profit soars on sales
Wed May 10, 2006 5:56 AM ET
By Chang-Ran Kim, Asia auto correspondent
TOKYO (Reuters) - Toyota Motor Corp. <7203.T>, the world’s most profitable car maker, booked a 53 percent rise in quarterly operating profit on Wednesday on healthy sales, cost cuts and a weaker yen, and predicted more growth this year despite currency headwinds and a spike in capital outlays.
Riding a reputation for making good, reasonably priced cars, Japan’s top auto maker has won over customers around the globe, adding half-a-million cars to its annual sales for the past five years. It expects to build more than 9 million vehicles in 2006.
Toyota, whose market capitalization of $217 billion values it higher than the South African economy, has cranked up profits to record levels even as it faced soaring raw materials prices and cut-throat competition and spent more on facilities and vehicle development.
Compiling group-based earnings forecasts for the first time, the leading maker of fuel-sipping hybrid cars projected a modest 1.2 percent rise in operating profit to 1.9 trillion yen ($17 billion) in the year to end-March 2007.
“The conservative estimates are understandable given that (Detroit’s) Big Three are not doing so well,” said Kazuhide Hayashi, a fund manager at Norinchukin Zenkyoren Asset Management.
A survey of 21 brokers by Reuters Estimates put the profit figure at a more bullish 2.013 trillion yen for 2006/07.
The growth would come despite a rise in anticipated capital expenditure to a record 1.55 trillion yen this year from 1.5288 trillion yen spent last year, with new capacity coming online in China, North America and Russia over the next few years.
Toyota also expects to jack up spending on research and development by more than 100 billion yen to 920 billion yen this year as it prepares to launch a third-generation hybrid system.
“We want to further strengthen the momentum of rising revenue and profits,” President Katsuaki Watanabe told a news conference. “But spending on R&D and facilities is going to stay high, and how to manage this is a going to be a big issue for us.”
At the net level, Toyota forecast a 4.5 percent fall to 1.31 trillion yen from last year, when it saw valuation gains from the merger of UFJ Holdings into Mitsubishi UFJ Financial Group <8306.T>. Without that factor, the profit would rise, it said.
The projections were based on assumed dollar and euro rates of 110 and 135 yen versus an average 113 and 138 yen last year.
SALES CHARGE SEEN CONTINUING
Most of Toyota’s domestic rivals also reported record annual earnings as they won more customers from North America to Europe.
U.S. auto giants General Motors <GM.N> and Ford Motor <F.N>, meanwhile, have plunged to losses under attack from Asian competition and burdened by legacy costs, prompting massive job cuts and plant closures. In Europe, Volkswagen <VOWG.DE> is also looking to shed tens of thousands of jobs.
Toyota, which last month outsold DaimlerChrysler <DCXGn.DE> in the United States, said it expects to drive up global sales by another 6.0 percent to 8.45 million vehicles this business year, counting trucks and cars built by units Hino Motors Ltd. <7205.T> and Daihatsu Motor Co. <7262.T>.
Toyota expects the biggest contribution to come from North America, where it faces a rare challenge to its seemingly spotless image from a high-profile sexual harassment lawsuit that led to the resignation this week of its top U.S. executive accused of groping his former assistant.
Watanabe declined specific comment on the case beyond saying it was a “grave” matter, but added he expected the scandal to pose no damage to Toyota’s bottom line.
For its January-March fourth quarter, the maker of the Prius and Camry sedans had an operating profit of 586.70 billion yen ($5.28 billion), beating market estimates for 493.7 billion yen. Net profit climbed 39 percent to 404.10 billion yen, and revenue was up 17.8 percent at 5.75 trillion yen.
For 2006/07, Toyota forecast record revenues of 22.30 trillion yen, up 6.0 percent.
Responding to criticism from some quarters that it was slow to reward shareholders, Toyota raised its dividend for the last business year to 90 yen per share from 65 yen in 2004/05, putting its group-based dividend payout ratio at 21.3 percent.
Watanabe said Toyota would aim to boost the ratio to 30 percent in three to five years, offering a timeframe for the first time.
Toyota also said it would seek approval to buy back up to 200 billion yen ($1.8 billion) of its own shares by June 2007. The planned purchase, representing 30 million shares, would account for less than 1 percent of outstanding stock.
Shares in Toyota gained 5.1 percent in January-March, underperforming the main Nikkei stock index <.N225> and a 7.3 percent rise in Tokyo’s transport sector subindex <.ITEQP.T>.
The stock has since climbed another 5 percent, but it closed down 0.7 percent at 6,680 yen ahead of the results on Wednesday.
