Toyota assures investors of recovery

REUTERS

Toyota workers check new Corollas coming off the production line at the Miyagi plant in northern Japan. The company plans to produce five million vehicles in Japan in 2012, 40 percent of them for export.

Toyota president Akio Toyoda assured shareholders on Friday that Japan's top automaker had recovered from last year's disasters even as power shortages continue to dog the country.

The earthquake and tsunami in northeastern Japan and the flooding in Thailand in 2011temporarily hobbled production for all the Japanese automakers, but they have since recovered.

Toyoda told a packed hall at the automaker's headquarters in Toyota City: “We were able to recover more quickly than we expected.”

“We want to work to revive Japan and bring more smiles to Japan.”

Toyoda also fielded questions underlining nervousness about Japan's electricity supply, stemming from another disaster - the nuclear crisis caused by the meltdowns at Fukushima Dai-ichi nuclear power plant. All of Japan's reactors are now offline after being shut down for routine safety checks, with imports of oil and gas being used to fuel other generators.

Toyota executive Atsushi Niimi acknowledged the region's utility had asked Toyota to reduce power consumption by five percent.

But the company was already working on reductions by switching to more efficient LED lighting, setting air conditioning at 28

degrees and boosting its ability to generate its own power.

Niimi told a shareholder who asked why the hall was so well lit: “There is no reason to worry about an electricity supply this summer.”

The meeting drew nearly 4000 people to this central Japanese city named after the company.

Items on the agenda, including promotion of executives, all passed smoothly with a round of applause.

The maker of the Camry sedan, Prius hybrid and Lexus luxury models is projecting a strong turnaround following the disaster-struck previous year.

It is forecasting a profit of ¥760 billion (R80 billion) profit for the year ending March 2013, after net profit plunged 30 percent to ¥283.6 billion (R30 billion) for the year ending in March 2012.

Toyota is rolling out new models and aggressively remodeling its lineup to steer its turnaround.

And it's looking to emerging markets for growth, targeting 50 percent of its global vehicle sales in such countries by 2015. Toyota already sells more than three million vehicles a year in emerging markets, or 45 percent of its global sales of 7.1 million vehicles.

But it faces an increasingly powerful Hyundai, a resurgent General Motors and Volkswagen, who all remain hard to beat in key growth markets such as China.

The automaker expects to sell 8.7 million vehicles worldwide this fiscal year, up from 7.4 million vehicles sold for the year up to March 2012.

A couple of shareholders expressed worries about the ability of Toyota to keep its promise to preserve production of three million vehicles in Japan.

“Can you really sell three million cars in Japan?”

Niimi said Toyota planned to sell half of that in Japan and export the rest. Officials acknowledged that it would be better to sell more in Japan because of the strong yen that puts Toyota at a disadvantage in the US and other markets against Volkswagen and Hyundai.

Vehicle demand in Japan in 2011 totaled 4.2 million vehicles, down 15 percent from the previous year, but is expected to grow 19 percent to five million vehicles this year, according to the Japan Automobile Manufacturers Association.

Toyota's image suffered in North America over a series of huge recalls since 2009, and its US sales fell in 2011. But sales and market share in the US have recovered.

The auto industry provides more than five million jobs in Japan, including auto workers, suppliers and dealers.

Toyoda, the grandson of the company’s founder, said he hoped the company will help in an overall Japan revival from the disasters.

He got choked up in thanking the flood of email and other encouragement Toyota had received to “gambare,” which means “keep going.”

“Our spirit of never giving up means I want ours to be a company that keeps growing,” he said. - Sapa-AP

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