Toyota reports dip in quarterly profit, projects recovery

TOKYO (AP) — Japan's top automaker Toyota said Wednesday its profit for January-March fell 4% as vehicle sales lagged in North America, while smaller car manufacturer Honda reported a loss.

Toyota Motor Corp. recorded a quarterly profit of 459.5 billion yen, or $4.2 billion, down from 480.8 billion yen in the same period the previous year. Quarterly sales rose 2% to 7.75 trillion yen ($70 billion), the company said.

The maker of the Camry sedan, Prius hybrid and Lexus luxury models is projecting a profit of 2.25 trillion yen, or $20 billion, for the fiscal year through March 2020, up nearly 20% from 1.88 trillion yen ($17 billion) for the fiscal year through March 2019.

The company said results for the fiscal year through March this year were hurt by the absence of a U.S. tax break that boosted earnings in the previous fiscal year, and by investment losses.

Still, the 30.2 trillion yen ($275 billion) in annual revenue Toyota reported was the first time a Japanese company has recorded sales above 30 trillion yen ($273 billion), a milestone for Japan Inc., according to Japanese media reports.

For the fiscal year that ended in March, Toyota sold 10.6 million vehicles around the world, up from 10.4 million vehicles in the previous fiscal year.

Toyota's vehicle sales grew in Europe and Asia excluding Japan, but fell in North America, an important and lucrative market.

Chief Executive Akio Toyoda told reporters Toyota must adapt to changes in the industry, such as self-driving vehicles, net-connectivity, ecological technology and car-sharing, to stay competitive.

"My mission is to put Toyota through a full model change to become a mobility company," instead of just a car manufacturer, he said.

Toyoda noted partnerships with Uber and other Silicon Valley businesses, as well as with SoftBank Group Corp., a Japanese internet company, will offer technology for various fields, not just vehicles.

Toyota's production methods, admired around the world for efficiency and worker empowerment, are advantages, he said.

But Toyoda, a grandson of the automaker's founder who has led the company since 2009, also recalled memories of hardship, such as a massive recall fiasco that had him questioned in U.S. Congress in 2010.

"Every day has been nerve-wracking," he said.

Also Wednesday, Honda Motor Co. reported a loss of 13 billion yen ($118 million) for January-March, despite growing sales, as an unfavorable exchange rate, income tax expenses and other costs hurt results. Chief Executive Takahiro Hachigo announced Honda will streamline its product offerings, consolidating model variations, and increase parts-sharing to cut costs.

Nissan Motor Co., reeling from the arrest of its former chairman, Carlos Ghosn, on financial misconduct charges, reports financial results on May 14.