Toyota hits targets but remains cautious

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Toyota refuses to be tempted away from its low-risk growth strategy, even as the world’s bestselling carmaker met its mid-term profit goals in the year ended March, and foresees even higher earnings this fiscal year.

The company has exceeded the target President Akio Toyoda set two years ago: to make 1 trillion yen in annual operating profit, and do so with a 5 per cent margin. Its manufacturing arm in Japan also made a profit for the first time in five years, a symbolic triumph for a titan of Japanese industry.

This year, the company will concentrate on sharpening productivity in order to become more competitive, Toyoda said.

Mindful of lessons learned from huge losses run up in 2008 after a period of boom and rapid expansion, it sees high profits as no reason to launch into a building programme – even as some rivals do exactly that.

“The wind that was blowing against us is calming down, and we can hear some saying that it is the time for us to take the offensive. But I think we are just standing at the startline of sustainable growth,” the 57-year-old grandson of the founder of Toyota’s automotive business said.

Toyota expects to make operating profit of 1.8 trillion yen ($18.17bn) in the fiscal year that ends March 2014, which would be below its peak of 2.3 trillion yen in the year ended March 2008.

Powering that will be another year of record group sales in calendar year 2013, the company believes, reaching 9.91 million vehicles. It could become the first carmaker in history to sell more than 10 million vehicles in a year.