An assortment of new models, including the latest Avalon sedan, have helped drive Toyota's surge.
Toyota has substantially increased its earnings forecast for the current fiscal year, predicting profits now will triple when compared with what it delivered in the wake of the March 2011 Japanese earthquake and tsunami that nearly shut the maker down.
The maker has issued an advisory that it will deliver a net profit of 860 billion yen, or $9.3 billion for the current financial year, which runs through March 31st. It had previously anticipated earnings of 780 billion yen, or $8.5 billion.
“We believe that our efforts have been bearing fruit and that we are finally on the road to sustainable growth,” said Takahiko Ijichi, senior managing officer at Toyota.
A variety of factors appear to be contributing. Of course, it helps to have gotten its factories back up and running after the shortages of 2011 which cost it 100s of thousands of units of lost production. But it doesn’t hurt, either, that demand has been soaring, especially in the key North America market.
Meanwhile, a recent decline in the yen has also improved its balance sheet, especially for cars and components produced in Japan. Since last November, the Japanese currency has fallen 15% against the American dollar.
The latest forecast comes as Toyota delivered a 23% jump in its earnings for the September to December quarter. The maker delivered a net profit of 99 billion yen, or $1.09 billion, compared with 81 billion the previous year. That means that for the first nine months of the fiscal year, Toyota earnings have quadrupled.
Other Japanese makers have been showing similarly improved vigor. But that doesn’t mean smooth sailing. They’re collectively facing problems in China where a dispute with Japan over an unoccupied chain of islands in the South China sea has led to a consumer boycott. In fact, last autumn, rioters even burned one Toyota dealership and damaged many of its vehicles on the road.
Sales have slowly been recovering but most analysts expect demand in China to lag for the months ahead.
Toyota also has some of its own, unique problems, including a series of recalls that threaten to tarnish its image of quality, reliability and durability. It was, in fact, the maker topping the list of recalls in the U.S. market in 2012 – for the third time in four years – and has already recalled more than 1 million vehicles in 2013. Nonetheless, that has so far appeared to have little impact on demand.
In fact, Toyota reclaimed its crown as the global sales leader in 2012, a position it hopes to maintain in the New Year.