Toyota to see first net profit fall in four years
10-23-2005, 01:09 AM
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Toyota to see first net profit fall in four years
Kyodo News Service & the Japan Times
http://www.japantimes.com/cgi-bin/ge...20051023a3.htm
NAGOYA (Kyodo) Toyota Motor Corp.'s group net profit for the first half of fiscal 2005 is likely to register its first year-on-year decline in four years, sources said Saturday.
While Toyota's sales are expected to increase to nearly 10 trillion, yen rapid expansion of production capacity has squeezed profits, the sources said.
Consolidated operating profit should also show a decline for the first time in six years, they said.
The projections are based on U.S. accounting standards.
In addition to the increased costs for capacity expansion, the fall in profits is attributable to consumer preference shifting to fuel-saving smaller vehicles in the face of rising gas prices, the sources said.
This has increased the sales ratio of such vehicles to Toyota's total sales, shrinking its profit as smaller vehicles are less profitable per unit, they added.
However, the automaker's overall performance was stable during the period as sales were buoyant, particularly in North America, they said.
The trend of falling profits has been seen since Toyota's April-June quarter for which it reported a net profit of 266.8 billion, yen down 9.6 percent from the same period the previous year.
Remarking on the quarterly performance, a senior Toyota official said the firm had come to "a pause" in terms of profit growth.
In the first half of fiscal 2004, Toyota reported a group net profit of 584.04 billion, yen up 11.4 percent from the previous year.
The Japan Times: Oct. 23, 2005
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http://www.japantimes.com/cgi-bin/ge...20051023a3.htm
NAGOYA (Kyodo) Toyota Motor Corp.'s group net profit for the first half of fiscal 2005 is likely to register its first year-on-year decline in four years, sources said Saturday.
While Toyota's sales are expected to increase to nearly 10 trillion, yen rapid expansion of production capacity has squeezed profits, the sources said.
Consolidated operating profit should also show a decline for the first time in six years, they said.
The projections are based on U.S. accounting standards.
In addition to the increased costs for capacity expansion, the fall in profits is attributable to consumer preference shifting to fuel-saving smaller vehicles in the face of rising gas prices, the sources said.
This has increased the sales ratio of such vehicles to Toyota's total sales, shrinking its profit as smaller vehicles are less profitable per unit, they added.
However, the automaker's overall performance was stable during the period as sales were buoyant, particularly in North America, they said.
The trend of falling profits has been seen since Toyota's April-June quarter for which it reported a net profit of 266.8 billion, yen down 9.6 percent from the same period the previous year.
Remarking on the quarterly performance, a senior Toyota official said the firm had come to "a pause" in terms of profit growth.
In the first half of fiscal 2004, Toyota reported a group net profit of 584.04 billion, yen up 11.4 percent from the previous year.
The Japan Times: Oct. 23, 2005
(C) All rights reserved
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