Toyota withdraws outlook on Thai floods, quake, yen

Tue Nov 8, 2011 6:35am EST
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By Chang-Ran Kim, Asia Autos Correspondent

TOKYO (Reuters) - Toyota Motor Corp (7203.T: Quote) withdrew its annual profit guidance on Tuesday as Thai floods threaten output just as it had recovered from supply shortages that battered production after the March earthquake in Japan.

Like Toyota, Honda Motor Co (7267.T: Quote) also dropped its earnings forecasts after being hard hit by Thailand's worst floods in at least 50 years, although Nissan Motor Co (7201.T: Quote) raised its outlook as it adapts more quickly to the disaster.

Toyota, Japan's top automaker, posted a bigger-than-expected 32 percent slide in quarterly operating profit, crimped in part by a soaring yen as the company was recovering from the earthquake and tsunami.

But it reaffirmed a commitment to manufacture at home even if the yen's strength makes exports less competitive against rivals such as South Korea's Hyundai Motor Co (005380.KS: Quote) and it outlined plans to cope with the exchange rate.

Once the world's most envied and profitable automaker, Toyota has lost its shine against domestic rival Nissan, which a Toyota executive said may have proven more adept at dealing with the crises affecting both companies this year.

"I can't deny that Nissan may have done some things right, given the outcome of how they recovered from both the earthquake and the floods," Toyota's chief financial officer, Satoshi Ozawa, told a news conference. "If there's something there to learn from, we'd like to do that."

Toyota's three vehicle plants in Thailand, its Southeast Asian export hub, halted work on October 10 because of the floods, and a shortage of parts forced it to cut output in nine other countries including Japan. The three plants will be down at least until November 12, the company has said.

Toyota said operating profit for July-September, its second quarter, was 75.39 billion yen ($966 million), far short of an average estimate of 101.3 billion yen in a Reuters survey of 12 analysts.   Continued...

<p>A staff of Toyota Motor Corp checks the inside of a vehicle displayed at the company's showroom in Tokyo November 1, 2011. REUTERS/Yuriko Nakao</p>