Toyota’s Q1 loss is less than forecast

AFTER grossly underestimating its first ever operating loss last financial year, Toyota Motor Corporation has now revised downwards its loss forecast for the current fiscal year, following a lower than expected profit plunge in the first quarter.

The world’s biggest car-maker yesterday (August 3) announced an operating loss of ¥194.86 billion ($A2.42b) for the first quarter of the Japanese fiscal year, ending June 30.

The result was better than market forecasts of shortfalls of more than ¥200 billion ($A2.49b) and represents a significant turnaround on the January-March quarter, when Toyota’s losses amounted to ¥765.8 billion ($A9.52b).

But the lighter-than-expected red ink is in stark contrast to the ¥353.66 billion ($A4.4b) operating profit Toyota recorded in the first quarter of last year. The company’s Q1 revenue fell 38.3 per cent to ¥3.84 trillion ($A47.76b).

Toyota joined Mitsubishi (down ¥29 billion or $A366m) and Mazda (down ¥28 billion or $A353m) in notching up its third consecutive quarterly operating loss, while Honda (up ¥25 billion or $A315m) and Suzuki (up ¥6.9 billion or $A86.9m) both posted operating profits.

In an indication the worst could be over for Toyota and perhaps other car-makers, Toyota has now upgraded its full-year financial forecast on the back of higher than anticipated vehicle sales.

The Japanese giant, which outsold General Motors for the first time last year, expects to sell 6.6 million vehicle this business year (up from its previous estimate of 6.5 million) and has lowered its operating loss projection from ¥850 billion ($A10.57b) to ¥750 billion ($A9.33b).

Meantime, BMW also announced its June quarter results yesterday, with the German juggernaut posting a return to profit during the second quarter of its fiscal year.

As we reported on Monday, Europe’s dominant Volkswagen Group defied expectations by posting a first-half operating profit of €1.24 billion ($A2.1b), thanks largely to its home country’s scrappage scheme.

Meanwhile in France, PSA Peugeot-Citroen and Renault both logged unexpectedly big first-half operating losses of €826 million ($A1.4b) and €946 million ($A1.6b) respectively.

As for BMW, which declined to provide a full-year financial outlook, there was cause to be confident, with chairman Norbert Reithofer yesterday saying in Munich: “Our foresighted financial and cost management strategies are paying off. Despite some tentative positive signals, a lasting and wide-ranging recovery is not yet in sight”.

The BMW Group reported a second-quarter after-tax profit of €121 million ($A207.2m) – down from €507 million ($A868.5m) during Q2 2008.

Total sales of BMW, Mini and Rolls-Royce cars during the June quarter slumped by 18.1 per cent, from 413,087 last year to 338,190 in 2009, with BMW sliding 18.6 per cent (280,093 vehicles), Mini off 15.7 per cent (57,942 cars) and Rolls down 50.3 per cent – to 155 cars.

BMW sold 615,454 vehicles in the first half of 2009 – down 19.5 per cent year-on-year but enough for BMW to continue to claim global premium vehicle leadership.

Like Toyota, however, BMW has been forced to lay off workers as its reduced production. As of June 30, BMW’s global workforce stood at 98,261 – down 7.3 per cent on the 106,027 employees it held on June 30, 2008, but just 1.8 per cent less than its staffing level at the start of this year.