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Toyota Sees Operating Profit Of $12 Billion In 2-3 Years

March 8, 2011
2 min to read


TOKYO - Toyota Motor Corp will forecast a near doubling of operating profit to a minimum of 1 trillion yen ($12.1 billion) in two to three years as part of its business roadmap to be unveiled on Wednesday, a source said.


Toyota will also seek to boost its operating profit margin to at least 5 percent in the same time frame, up from an estimated 2.9 percent in the current financial year ending this month, the source said, confirming figures reported earlier by the Nikkei newspaper, reported Automotive News.

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The figures are not strict financial targets but an estimate of what the company should be capable of as it reduces costs and strengthens its operations, even at a dollar rate of 85 yen, the source said, declining to be identified because the information is not public yet.


The operating profit forecast is roughly in line with market expectations, with 15 analysts putting the profit at 1.14 trillion yen for the year ending March 31, 2013, according to poll by Thomson Reuters I/B/E/S.


President Akio Toyoda is due to announce a new "global vision" for the next 10 years for the world's biggest automaker at 4 p.m. local time (2 a.m. EST). Among other measures likely to be outlined is the reduction of Toyota's directors to 11 from 27.


Among the board members shedding their seats will be Yoshimi Inaba, head of Toyota's North American unit, a person familiar with the plan said this week. Inaba, 65, is president and COO of Toyota Motor North America Inc. and chairman of Toyota Motor Sales U.S.A. Inc.


Since taking up his post in June 2009 in the aftermath of the global financial crisis, Toyoda, grandson of the company's founder, has often spoken of the need to go back to the basics of "making better cars and contributing to society."

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That vision became a directive as a recall of millions of cars, mainly for complaints of unintended acceleration, damaged its once-impeccable quality image, especially in the United States. Toyota has recalled nearly 20 million vehicles worldwide since late 2009.


Last month, the U.S. government said Toyota's electronics were not the cause of vehicles found to have accelerated unintentionally.


Toyota's Global Vision for 2020 is expected to map out where Toyoda wants to take the company without being caught up with short-term financial goals. Toyoda outlined some of those initiatives in 2009, including developing cars suited to each market rather than selling the same vehicle around the world.


Toyota has forecast a group operating profit of 550 billion yen in the current business year ending this month, based on the assumed dollar rate of 86 yen.

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