Toyota to Regain Top Spot Amid 270-Fold Profit Jump

Toyota boosted its sales forecast for 2012 to a level that will put it back on top of the global auto industry amid Q2 profits about 270 times bigger than those of the same period of last year.

Toyota revised upward its sales target for this year by 180,000 to a record 9.76 million vehicles Friday. That figure will likely top GM’s sales for the year in light of the 6% drop in GM’s sales in the month of July. GM sales rose 2.9% during the first half of the year to 4.67 million vehicles while Toyota’s surged 34% to 4.97 million. Volkswagen, the other contender for the top-automaker title, posted 8.9% growth to 4.45 million.

In 2011 Toyota sales had plunged to 7.95 million vehicles amid supply-chain breakdowns caused by the March 11, 2011 earthquake and tsunami. During the 2nd quarter of 2011 Toyota sales had been cut nearly in half to just 1.3 million vehicles. Toyota sales also began tumbling due to image-damaging recalls of 14 million vehicles over the past three years.

The profit picture is even more favorable to Toyota’s prospects for continued growth. During the 2nd quarter its profits skyrocketed to 290.3 billion yen ($3.7 billion) from just 1.1 billion yen ($14.1 mil.) last year amid a 60% revenue surge to 5.5 trillion yen ($70.5 bil.). Its new sales target would represent a 23 percent increase from the 7.95 million vehicles sold in 2011, and is 180,000 vehicles more than Toyota’s last forecast in February.

Toyota’s biggest sales gains come from North America and China, with Europe, Japan and the rest of Asia also contributing, though the biggest share of profits come from the United States where its July vehicle sales surged 26% over last July.

As its fortunes began tumbling with massive recalls that began three years ago, Toyota embarked on a cost-cutting program that produced savings of 70 billion yen ($897 million) during the second quarter, more than offsetting the 40 billion yen ($513 million) of overseas operating profit lost due to a strong yen.

Toyota’s Japanese rival Honda reported a quadrupling of quarterly profits to 131.7 billion yen ($1.7 billion) on a 42% sales surge. In the month of July Honda sales soared 45% — leading all carmakers in growth.

On the other hand, Nissan quarterly profits fell 15% to 72.3 billion yen ($900 million). But its forecast for the fiscal year ending March 2013 was raised to 400 billion yen ($5 billion) from 290 billion yen ($3.6 billion).