Toyota still in profit despite tough conditions

While automakers the world over are struggling in the current economic climate, and Ford and GM in particular have declared huge quarterly losses, Toyota has also seen profits fall, but it is still the most profitable automaker in the world.  ┬á ToyotaÔÇÖs net income in the three months to June 30 fell 28 percent to 353.7 billion yen ($3.2 billion), from a record 491.5 billion yen in the same period of last year. ┬á┬á Toyota said the trading environment had taken a sharp turn for the worse, creating a "very tough" quarter. The weak US economy and the stronger yen, which makes Japanese goods more expensive overseas, have dented sales. Toyota is not immune to the rising price of raw materials, either, a factor affecting automakers everywhere. Toyota put a cost-reduction program in place earlier this year aimed at cutting 300 billion yen, or $2.7 billion, but Takahiko Ijichi, Toyota's senior managing director, said in a conference call Thursday that all of the company's gains have been wiped out by higher steel, plastic and other raw material costs.┬á┬á  Toyota announced plans in July to begin assembling the Prius gas-electric hybrid in 2010 at a plant in Blue Springs, Mississippi. It is also suspending production of its Tundra pickup and Sequoia SUV from this week through mid-November.┬á┬á While its US sales have slowed, however, Toyota has continued to gain market share in North America, and has seen rising sales in Russia and China. The company is therefore maintaining its earnings outlook for the year to March 2009, predicting net income of $11 billion. ┬á┬á US auto manufacturers are having a harder time than their Japanese counterparts, partly because of a consumer swing away from gas-guzzling pickup trucks and SUVs to more fuel efficient models, such as ToyotaÔÇÖs Prius hybrid.┬á┬á General Motors recently reported a $15.5 billion quarterly loss and Ford's three-month loss was $8.7 billion. By contrast, Japanese rival Honda recently reported an unexpected rise in quarterly profits, although has also seen first quarter income down over 40 percent.  ┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *