Toyota has announced financial results for the six months ended September 30, 200- the first half of FY 2010 which ends in March.

Although the economic downturn continues to dog Toyota, it has revised its forecast for the full fiscal year upward based on various government attempts to stimulate the world economy.

On a consolidated basis, the net revenues for the first half of the fiscal year totaled 8.378 trillion yen, a decrease of 31.3 percent compared to the same period last fiscal year. Operating income decreased from 582.0 billion yen to a loss of 136.9 billion yen, while income before income taxes and equity in earnings of affiliated companies was a loss of 63.0 billion yen. Net income* decreased from 493.4 billion yen to a loss of 56.0 billion yen.
* Net income attributable to Toyota Motor Corporation

Operating income, compared to the same period last fiscal year, decreased by 718.9 billion yen. Major factors contributing to the decline include 910.0 billion yen due to the effects of sales volume and mix and 320.0 billion yen due to the appreciation of the Japanese yen against the U.S. dollar and the euro that overrode the positive impact of Toyota’s cost reduction efforts.

TMC Executive Vice President Yoichiro Ichimaru said, “The net revenues and profits declined for this period due to the decline in vehicles sales in each region, as well as the negative impact of the yen’s appreciation. However, we continued to make improvements in our reduction in fixed costs and cost reduction efforts in the first half of fiscal year 2010. Progress with our Emergency Profit Improvement activities have been steadily bearing fruit. In addition, demand-stimulating measures by governments worldwide have contributed to our revised targets for the full fiscal year.”

Consolidated vehicle sales for the first half totaled 3.13 million units, a decrease of 1.12 million units compared to the same period last fiscal year.

In Japan, operating income decreased by 579.4 billion yen, to a loss of 257.7 billion yen, mainly due to the appreciation of the yen against the U.S. dollar. However, monthly vehicle sales in the domestic market have been improving year on year since August.

In North America, operating income decreased by 7.4 billion yen to 26.9 billion yen including 14.9 billion yen of valuation gains on interest rate swaps. Operating income, excluding the impact of valuation gains on interest rate swaps, increased by 56.7 billion yen to 12.0 billion yen. The increase was due to improved earnings from the financial services segment.

In Europe, operating income decreased by 27.3 billion yen, to a loss of 18.6 billion yen. Operating income in Asia decreased by 71.8 billion yen, to 65.4 billion yen. In Central and South America, Oceania and Africa, operating income decreased by 38.5 billion yen to 40.6 billion yen.

In the financial services segment, operating income increased by 17.2 billion yen, to 124.4 billion yen compared to the same period last fiscal year including 16.9 billion yen of valuation gains on interest rate swaps. Excluding these valuation gains, operating income increased by 72.7 billion yen to 107.5 billion yen. The increase was due to improved lending margins as a result of a declining funding cost and decreased expenses relating to loan losses and residual losses mainly in North America.

TMC announced an interim cash dividend of 20 yen per share for the first half of the fiscal year, in consideration of the serious financial situation which resulted in a net loss for the period.

TMC again revised its consolidated vehicle sales for the full fiscal year ending March 31, 2010 from 6.60 million to 7.03 million units, an increase of 430 thousand units. This figure is a revision to the previous forecast announced in August 2009 and reflects the increase in sales due to the success of various governments’ measures to stimulate demand this year, as well as sales of TMC’s own hybrids and other environmentally-friendly vehicles.

TMC also revised its target for Emergency Profit Improvement activities from 900 billion yen to 1.250 trillion yen, reflecting the improved outlook for vehicle sales and the progress of variable and fixed cost improvements in excess of our previous plan.

As a result, consolidated net revenues were revised up to 18 trillion yen, operating income to a loss of 350 billion yen and net income to a loss of 200 billion yen.

Commenting on the amended forecasts for FY2010, Executive Vice President Ichimaru said, “We will continue to promote profit improvement activities across the company. However, the outlook for global vehicle demand still remains uncertain. We will therefore continue to carefully analyze the global market going forward in order to further improve our earnings prospects.”

Production of the Highlander sport utility vehicle, Toyota’s 12th North American-built model, has begun at the company’s plant in Princeton, Indiana. The $450 million investment is part of the adjustments Toyota began last year in order to streamline in light of the weakened economy.

Production of the Tundra pickup, originally in Indiana, was shifted last fall to the Tundra plant in Texas. Since then Toyota Motor Manufacturing, Indiana (TMMI), which also builds the Sienna and Sequoia, has been preparing for the Highlander.

“Highlander production gives us better use of our capacity and demonstrates our continued commitment to the U.S. and the state of Indiana,” said Wil James, TMMI senior vice president.

TMMI reacted to several months of slow production by retaining all of its 4,200 team members, who were further trained and improved manufacturing processes.

“The result is long-term sustainability of this factory, which is important to our customers, team members, suppliers and the local community,” James said.

TMMI now represents a $3.7 billion investment. The addition of Highlander boosts production at other Toyota plants such as West Virginia, where the 6-cylinder engine is made, and at nearly 250 of Toyota’s North American suppliers.

In Indiana alone, Highlander parts and components including items such as steel, brake parts and interior component assemblies will be provided by about 30 Tier 1 suppliers.

Toyota, still reeling from it’s largest-ever recall, has a new potential problem on the horizon. The NHTSA is investigating complaints against the 2000-2001 model year Toyota Tundra. NHTSA has received 20 reports relating to spare tire separation and brake system failures caused by severe frame corrosion.

There have been 15 reports alleging that the under-body mounted spare tire separated from the crossmember due to corrosion. There have been an additional 5 reports of broken brake lines at the proportioning valve located on the driver’s side of the rear crossmember at the upper shock mount.

There were over 200,000 Tundras sold in the affected model years.

Toyota Motor Sales (TMS), U.S.A., Inc., today reported September sales of 126,015 vehicles, a decrease of 16.1 percent from last September, on a daily selling rate basis. TMS posted sales of 525,975 units in the third quarter, a 28 percent increase over the second quarter.

“Improving economic conditions and the CARS program led to a significant increase for the industry in the third quarter over the first-half year,” said Don Esmond, senior vice president of automotive operations for TMS. “Moving into the fourth quarter, we expect continued momentum will close the year on a bright note.”

The Toyota Division posted September sales of 108,076 units, down 19.1 percent from last September. The Lexus Division reported September sales of 17,939 units, an increase of 7.3 percent from the year-ago month.

Toyota Division
Toyota Division passenger cars recorded September sales of 69,737 units, a decrease of 15.2 percent from last September. Passenger car sales were led by Camry and Camry Hybrid, which posted combined September sales of 25,745 units. The Prius mid-size gas-electric hybrid posted September sales of 10,984 units. Corolla recorded sales of 20,741 units. Venza reported sales of 4,738 units for the month.

Toyota Division light trucks posted sales of 38,339 units, down 25.3 percent from the year-ago month. Light truck sales were led by the RAV4 compact SUV with September sales of 10,398 units. Highlander and Highlander Hybrid posted combined sales of 5,216 units for the month. The Tacoma mid-size pickup reported sales of 7,513 units in September. The Tundra full-size pickup recorded September sales of 6,308 units. Sienna recorded sales of 6,442 units for the month.

Scion posted September sales of 3,683 units. The xB urban utility vehicle led the way with September sales of 1,539 units. The tC sports coupe posted September sales of 1,232 units. The xD reported sales of 912 units for the month.

Lexus Division
Lexus passenger cars reported September sales of 8,931 units, down 9.1 percent from the year-ago month. Passenger car sales were led by the IS, with combined sales of 3,346 units. The ES 350 luxury sedan posted September sales of 3,046 units.

Lexus Division light trucks reported September sales of 9,008 units, up 30.7 percent over the same period last year. Lexus sales were led by the RX luxury utility vehicle which posted combined September sales of 8,228 units, up 70.3 percent over the year-ago month. The RX 450h hybrid luxury utility vehicle reported sales of 1,168 units for the month, up 50.7 percent from last September.

TMS Hybrids
TMS calendar-year-to-date hybrid sales totaled 142,566 units. TMS posted September sales of 14,585 hybrid vehicles. Toyota Division posted sales of 12,125 hybrids for the month. Lexus Division posted September sales of 2,460 hybrids.

There were 25 selling days this month, compared to 24 selling days last September.

Toyota Motor Sales (TMS), U.S.A., Inc., has reported August vehicle sales of 225,088 vehicles, up 10.5 percent over year-ago levels on a daily selling rate basis. Toyota Division passenger cars recorded an all-time, best-ever month with sales of 142,529 units, up 32.4 percent over the same period last year as the CARS program generated significant incremental sales for TMS and the industry.

“In addition to increased sales, the CARS program provided tangible benefits to consumers, dealers and industry-related businesses, as well as state and local economies, in the form of sales tax and registration income,” said Jim Lentz, president and chief operating officer for TMS. “Toyota vehicles accounted for 19.4 percent of sales within the CARS program, but we estimate CARS-related Toyota sales account for 32.1 percent of total fuel savings for the CARS program, saving customers an estimated 31 million gallons of gas and over $77.5 million in fuel spending over the next year.”

The Toyota Division posted August sales of 202,196 units, an increase of 15.2 percent over the same period last year. The Lexus Division reported August sales of 22,892 units, a decrease of 18.8 percent from the year-ago month.

Toyota Division

Toyota Division passenger cars recorded an all-time, best-ever month with sales of 142,529 units, up 32.4 percent over the same period last year. Camry and Camry Hybrid remained Toyota’s volume leader in August, and posted an all-time, best-ever month with combined monthly sales of 54,396 units, up 28.2 percent over August 2008. The Prius mid-size gas-electric hybrid posted August sales of 18,886 units, up 45.7 percent from the year-ago month. Corolla recorded sales of 43,061 units, up 51.9 percent over last August. Yaris reported sales of 4,797units for the month.

Toyota Division light trucks posted August sales of 59,667 units, down 12.1 percent from the year-ago month. Light truck sales were led by the RAV4 compact SUV with all-time best-ever sales of 18,312 units, up 47.3 percent over the same period last year. Highlander and Highlander Hybrid posted combined sales of 10,656 units, up 37.1 percent over August 2008. The Tacoma mid-size pickup reported sales of 12,547 units for the month, up 5.0 percent over the year-ago month. The Tundra full-size pickup recorded August sales of 7,872 units.

Scion posted August sales of 10,727 units. The xB urban utility vehicle led the way with sales of 4,588 units, up 3.0 percent over last August. The tC sports coupe recorded sales of 3,082 units. The xD reported sales of 3,057 units for the month, up 15.1 percent over the same period last year.

Lexus Division

Lexus passenger cars reported August sales of 12,610 units, a decrease of 26.6 percent from August 2008. Passenger car sales were led by the ES entry luxury sedan with August sales of 5,629 units. The IS entry luxury sport sedan posted combined sales of 4,855 units.

Lexus Division light trucks recorded August sales of 10,282 units, down 6.6 percent from the year-ago month. Lexus sales were led by the RX and RX Hybrid luxury utility vehicle, which posted combined August sales of 9,317 units, up 7.9 percent over last August.

TMS Hybrids

TMS posted August sales of 24,191 hybrid vehicles, up 28.6 percent from the same period last year. Toyota Division recorded sales of 21,836 hybrids for the month. Lexus Division reported August sales of 2,355 hybrids.

There were 26 selling days this month, compared to 27 last August.

Toyota will add capacity at its engine plant in Huntsville, Ala., to increase North American production of four-cylinder engines. The expansion will allow Toyota Motor Manufacturing, Alabama (TMMAL) to produce 216,000 four-cylinder engines annually. Production will begin by summer 2011.

The plant currently builds both V8 and V6 engines. The expansion will bring its annual engine capacity to 577,000.

At least 240 new employees will be hired, raising total employment at TMMAL to more than 1,000. New investment will be $147 million, bringing the total to $637 million.

“The four-cylinder engines to be produced in Alabama will be for Camry and RAV4,” said Jim Wiseman, vice president of Toyota Motor Engineering & Manufacturing North America, Inc.

“Currently all engines for RAV4s made at our Woodstock, Ontario plant come from Japan, as well as engines for Camrys built at SIA in Lafayette, Ind.,” he explained. “We’re pleased to be moving all of this production to North America.”

He added that four-cylinder engines will continue to be built in Kentucky for Camry production at that plant.

Both of Toyota’s Bodine Aluminum castings plants, located in Troy, Mo. and Jackson, TN., will also add capacity to provide cylinder heads and blocks to TMMAL.

Combined investment for those two facilities will be $25 million with up to 60 new jobs.