At Cautious Toyota, Low Risk Rules Even As Profit Booms

Toyota Motor Corp. refuses to be tempted away from its low-risk growth strategy, even as the world's bestselling carmaker met its mid-term profit goals in the fiscal year ended March, and foresees even higher earnings this fiscal year. The company has exceeded the target President Akio Toyoda set two years ago: to make 1 trillion yen in annual operating profit, and do so with a 5 percent margin. Its manufacturing arm in Japan also made a profit for the first time in five years, a symbolic triumph for a titan of Japanese industry.

This year, the company will concentrate on sharpening productivity in order to become more competitive, Toyoda said. Mindful of lessons learned from huge losses run up in 2008 after a period of boom and rapid expansion, it sees high profits as no reason to launch into a building program - even as some rivals do exactly that.

Toyota expects to make operating profit of 1.8 trillion yen ($18.17 billion) in the fiscal year that ends March 2014, which would be below its peak of 2.3 trillion yen in the year ended March 2008. Powering that will be another year of record group sales in calendar year 2013, the company believes, reaching 9.91 million vehicles. It could become the first carmaker in history to sell more than 10 million vehicles in a year.

Toyota posted on May 8 an annual operating profit of 1.32 trillion yen with an operating margin of around 6 percent, beating a market that had expected 1.26 trillion yen profit. It said it expects to sell 2.2 million vehicles in the United States in 2013, up from about 2.1 million in 2012. The company is expected to release the Corolla compact car in the United States this year.

In Japan, where automotive-related jobs account for 8.7 percent of the workforce, according to the Japan Automobile Manufacturers Association, it is becoming more profitable to make and export goods as a result of a yen that has weakened by around fifteen percent against the dollar since January.

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