Under its “global vision” plan,Toyota Motor Corp. (TM) revealed that it expects to generate an operating profit of ¥1 trillion, translating into an operating margin of 5%, “as soon as possible” despite a backlash on the back of a strong yen. The projection assumed dollar and euro exchange rates of ¥85 and ¥110, respectively.
The operating profit guidance was nearly double of ¥550 billion, forecasted for the fiscal year ended March 31, 2011. Meanwhile, operating margin of 5% outlook exceeded 2.9%, expected for the same fiscal year.
Toyota expects emerging markets to contribute significantly to its overall growth in recent years. It aims to achieve 50% of sales from these markets, up from 40% presently. The company anticipates China to account for 15% of total sales.
However, the automaker projected global annual sales of 7.50 million vehicles, which was lower than the guidance of 7.53 million vehicles for fiscal 2011. Nevertheless, the company expects annual sales to reach 10 million vehicles by 2015 globally with green vehicles being one of its pillars of success. Toyota plans to launch as many as 10 hybrid models by 2015.
In order to support its sales expansion plan, Toyota will increase the number of overseas executive positions to 15 from 13. However, the company will shrink the size of its board of directors from 27 head to 11 heads.
Toyota’s projections seem highly optimistic given its falling profit and recall fiasco. In the third quarter of fiscal 2011, the company posted a 39% fall in profit to ¥93.63 billion ($1.14 billion) or ¥29.86 (36 cents) per share from ¥153.22 billion ($1.86 billion) or ¥48.86 (59 cents) per share in the year-ago quarter. The fall in profit was attributable to lower sales in the Japan, North America and Europe as well as stronger yen.
Consolidated revenues in the quarter dipped 12% to ¥4.67 trillion ($56.74 billion) on the back of a 13% fall in global sales volume to 1.8 million units. Vehicle sales declined 21% to 507,861 units in North America, 31% to 402,476 units in Japan and 5% to 207,621 units in Europe. Meanwhile, sales rose 21% to 334,504 units in Asia and 2% to 349,219 units in Other regions.
Since November 2009, Toyota has recalled more than 14 million vehicles globally in about 20 recalls, beating all other automakers. The recalls were related to faulty accelerator gas pedals, slipping floor mats and defective braking systems. The Transportation Department of U.S. also imposed a fine of $48.4 million due to late recall of millions of defective vehicles.
However, Toyota can possibly achieve its projected sales by 2015 being the world’s largest automaker by volume and enhancing the quality of its vehicles. In 2010, the automaker topped General Motors Company (GM) by 30,000 units with worldwide sales of 8.42 million vehicles.
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