Toyota Motor Corp. (TM) plans to tie up with Russia-based Sollers and Japanese firm Mitsui & Co. to assemble and sell passenger vehicles in Russia. The vehicles will be manufactured at Soller’s plant in Vladivostok.
Toyota intends to provide parts and train personnel for the production. Meanwhile, Sollers and Mitsui will assemble the vehicles at the factory in a 50-50 joint venture.
The tie-up will produce either a sedan or a sports utility vehicle designed by Toyota. The Vladivostok plant will be upgraded in order to be able to assemble about 30,000 vehicles annually.
Toyota manufactures 57% of its vehicles outside Japan in comparison to 72%–73% by its domestic rivals Honda Motor Co. (HMC) and Nissan Motor Co. (NSANY). The automaker started making vehicles in Russia in 2007 at its plant in St. Petersburg, where presently it manufactures about 20,000 units of Camry sedan per year.
Toyota’s sales in Russia went up 17% to 91,000 vehicles in 2010 from the prior year. The industry sales in the country are also expected to grow 17% to 2.24 million units in 2011.
Toyota, a Zacks #3 Rank (Hold) stock, depicted a 39% fall in profit to ¥93.63 billion ($1.14 billion) or ¥29.86 (36 cents) per share in the third quarter of fiscal 2011 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 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.
Toyota revised its estimates upward for fiscal 2011. The automaker anticipates vehicle sales in the range of 7.41 million–7.48 million units up from the prior estimate of 7.38 million–7.41 million units.
The company forecasted consolidated revenues to be ¥19.2 trillion, operating income to be ¥550 billion and net income to be ¥490 billion. This compared to the prior guidance of ¥19.0 trillion in consolidated revenues, ¥380 billion in operating income and ¥350 billion in net income.
HONDA MOTOR (HMC): Free Stock Analysis Report
NISSAN ADR (NSANY): Free Stock Analysis Report
TOYOTA MOTOR CP (TM): Free Stock Analysis Report
Zacks Investment Research
