Shares of Toyota Motor Corp plunged yesterday following a major business daily report that Toyota’s operating profit would fall 40 percent this fiscal year through March.
But Toyota senior managing director Yoichiro Ichimaru said his company was sticking with its financial targets for now, including this year’s global vehicle sales goals. He acknowledged, however, that the numbers were becoming increasingly tough to meet because of a drop in US sales.
The Nikkei Shimbun reported in yesterday’s editions that Toyota is likely to face troubles meeting its sales and global vehicle sales targets as sales growth in emerging markets aren’t likely to be enough to offset the declines in the US and Europe.
“When we look at our numbers, we see things are very critical,” Ichimaru said. “US and Europe sales are getting seriously hit because of the economic conditions.”
Speculation has been growing Toyota may lower its global vehicle sales target of 9.5 million vehicles at a time when the Japanese manufacturer has been going neck-and-neck in global vehicle sales against General Motors Corp (GM), the world’s top automaker.
Toyota stock slid 11.6 percent to close at ¥3,280 (US$33) amid a more than 9 percent plunge in the benchmark for Tokyo share prices as fears intensified about a global financial crisis. The carmaker’s shares have fallen 46 percent this year, set for its worst annual performance in at least 33 years. It has lost its spot as the world’s largest carmaker by market capitalization to Volkswagen AG.
The company’s operating profit may fall as much as 52 percent to ¥1.1 trillion (US$10.9 billion) for the year ending March 31 from ¥2.27 trillion in the previous year, according to three analysts surveyed by Bloomberg. That compares with Toyota’s goal of ¥1.6 trillion for this fiscal year.
The collapse of the mortgage market in the US, where Toyota gets about half its operating profit, has driven sales down the most in more than 20 years.
“The US economy is deteriorating day by day,” said Ichiro Takamatsu, chief investment officer at Tokyo-based hedge fund Alphex Investments Co. “The situation surrounding Toyota and other Japanese automakers won’t get better anytime soon, because auto demand is falling not just in the US but everywhere.”
Last week, Toyota offered an unprecedented zero-percent financing on models in the US to woo buyers after Japan’s top automaker posted a 32 percent drop in last month’s US vehicle sales.
Ichimaru’s comments underline pessimism at Toyota, which had averted the billions of dollars in losses in recent months suffered by its rival GM.
Toyota has been trying to make up for the plunging US auto market by boosting sales in emerging markets. But the recent declines in Japan, the US and Europe appear to be making that increasingly difficult.
Ichimaru was among the executives speaking at a Lexus showroom in Tokyo targeting foreign residents, set to open tomorrow. Although the Lexus was launched in the US about 20 years ago, the brand and dealerships were introduced in Japan only in 2005. Since then, Lexus dealers have grown to 165.
The new showroom offers foreign language services, including English, Chinese and Russian, to woo foreign residents, who still make up a tiny portion of Lexus buyers in Japan, Toyota said.
Global Lexus sales are falling short of last year’s 518,000 vehicles, and that trend is likely to continue for the rest of the year, Toyota managing officer Toshio Furutani said.
Toyota lowered its global vehicle sales target in July from the initial 9.85 million, given in January. Toyota sold 9.37 million vehicles around the world last year.
Toyota president Katsuaki Watanabe said last week the US market may not reach 14 million vehicles this year. Industrywide sales shrank to an annualized rate of 12.5 million last month.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to