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.”

The letter, in compliance with the National Traffic and Motor Vehicle Safety Act and reviewed by the National Highway Traffic Safety Administration (NHTSA) points out that no defect exists in vehicles in which the driver’s floor mat is compatible with the vehicle and properly secured.

The Toyota finding is consistent with a recent decision by NHTSA denying a request for an additional investigation of unwanted and unintended acceleration of model year 2007 Lexus ES350 vehicles and model years 2002-2003 Lexus ES300. After conducting an extensive technical review of the issue, including interviews with consumers who had complained of unwanted acceleration, NHTSA concluded that “…the only defect trend related to vehicle speed control in the subject vehicles involved the potential for accelerator pedals to become trapped near the floor by out-of-position or inappropriate floor mat installations.”

This is the sixth time in the past six years that NHTSA has undertaken such an exhaustive review of allegations of unintended acceleration on Toyota and Lexus vehicles and the sixth time the agency has found no vehicle based cause for the unwanted acceleration allegations.

“The question of unintended acceleration involving Toyota and Lexus vehicles has been repeatedly and thoroughly investigated by NHTSA, without any finding of defect other than the risk from an unsecured or incompatible driver’s floor mat,” said Bob Daly, TMS senior vice president.

“Toyota takes public safety seriously. We believe our vehicles are among the safest on the road. Our engineers are working hard to develop an effective remedy that can help prevent floor mat interference with the pedal. As soon as it is ready, we will notify owners of the relevant models to bring their vehicle to a dealer for the necessary modification at no charge,” Mr. Daly added.

In the recently completed investigation, NHTSA conducted extensive testing on a Lexus ES350. The agency reported that:

“The vehicle was fully instrumented to monitor and acquire data relating to yaw rate, speed, acceleration, deceleration, brake pedal effort, brake line hydraulic pressure, brake pad temperature, engine vacuum, brake booster vacuum, throttle plate position, and accelerator pedal position. Multiple electrical signals were introduced into the electrical system to test the robustness of the electronics against single point failures due to electrical interference. The system proved to have multiple redundancies and showed no vulnerabilities to electrical signal activities. Magnetic fields were introduced in proximity to the throttle body and accelerator pedal potentiometers and did result in an increase in engine revolutions per minute (RPM) of up to approximately 1,000 RPM, similar to a cold-idle engine RPM level. Mechanical interferences at the throttle body caused the engine to shut down.”

The Toyota letter is an interim notice to owners of a future voluntary safety recall campaign. The following models are affected:

• 2007 – 2010 Camry
• 2005 – 2010 Avalon
• 2004 – 2009 Prius
• 2005 – 2010 Tacoma
• 2007 – 2010 Tundra
• 2007 – 2010 ES350
• 2006 – 2010 IS250 and IS350

Until Toyota develops a remedy, it is asking owners of affected Toyota and Lexus models to take out any removable driver’s floor mat and NOT replace it with any other floor mat.

The Toyota letter also informs owners of what to do if they experience accelerator pedal interference, general floor mat warnings and proper floor mat application information. Owners who have further questions are asked to visit http://www.toyota.com/floormats or http://www.lexus.com/floormats where the owner letter in its entirety can also be viewed. The most recent NHTSA report can be viewed on these websites as well.

TMC leaves F1 having compiled 13 podium and 87 point finishes over eight
challenging seasons since 2002 with Panasonic Toyota Racing.

Be sure to check out our complete coverage of the 2010 4Runner in our trucks section here at Toyoland.com

The 2010 4Runner is being entered in the “stock mini” class of the 42nd Tecate SCORE Baja 1000 race- a 672 mile long desert race with a time limit of 31 hours. The single-loop race starts and ends in Ensenada, Mexico on November 20 through 21 and draws tens of thousands of spectators along the route. Typically, only about half of the racers complete the course withing the 31-hour time limit.