Toyota suffers output, sales drop

October 25, 2010
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, TOKYO, Oct 25 – Japanese auto giant Toyota said Monday its worldwide production suffered the first drop in a year in September on slower domestic sales and exports while its rivals reported robust growth.

The world\’s largest automaker, which has been battered by a global recall crisis that has affected more than 10 million vehicles worldwide, last week announced a further recall of 1.5 million vehicles to fix a brake problem.

The figures come as a report Monday said the company was facing a near two billion dollar hit as it revises down its dollar forecast, with the greenback sitting at 15-year lows against the yen.

Toyota\’s worldwide production, excluding output by Daihatsu and Hino subsidiaries, fell 1.3 percent from a year earlier to 672,604 units in September, marking the first year-on-year fall in 12 months.

Domestic production in Japan fell 1.4 percent from a year earlier to 305,853 units, the first drop in 11 months. Sales in Japan shrank for the first time in 14 months on the expiration of government incentives for buyers, falling 6.3 percent to 133,843 units.

"Domestic sales have been soft as the government subsidies (to purchase energy-saving vehicles) expired" in early September, Toyota spokeswoman Shiori Hashimoto said, adding exports also decreased.

Exports tumbled 11.0 percent to 148,836 units, the first drop in nine months, due to decreased exports to North America, Europe and the Middle East as stable gasoline prices reduced demand for fuel sipping hybrids, she said.

Shipments to Europe fell on the expiration of government incentives to replace old cars with newer, environment-friendly models in France, Britain and Italy, she said.

However, Toyota\’s smaller rivals reported robust figures for both production and exports.

Nissan Motor said its global production soared 27.0 percent to 395,658 units, a record for a single month, as exports rose 38.3 percent.

Honda said worldwide production rose 9.2 percent to 328,368 with exports surging 67.1 percent.

Japanese automakers, although enjoying strong sales, are struggling to cope with the yen\’s advance against other currencies, which erodes their overseas revenue when repatriated.

The dollar hit a new 15-year low of 80.41 yen in Tokyo Monday.

The Yomiuri daily reported Monday that Toyota would revise its dollar forecast for the second half of the current business year to March to 80 yen, which will mean a 1.85 billion dollar hit to its earnings.

Toyota, which announces April-September earnings on November 5, will revise its currency forecast from 90 yen to 80 yen to the dollar, reflecting the Japanese unit\’s relentless strength, the paper reported.

The world\’s largest automaker will take a 150 billion yen (1.85 billion dollars) hit to its earnings in the second half of the fiscal year to March, it said without naming sources. Toyota declined to confirm the report.

Toyota\’s annual earnings decline 30 billion yen on every one yen increase against the dollar, the report said.

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