Japanese car giant Toyota said today that it returned to the black in the fiscal year ended March and forecast surging profits despite being hit by a massive global recall crisis.
The world's largest car maker reported an annual profit of 209.4 billion yen ($2.2 billion) and said it expected the figure to soar 48% in the current year, despite pulling around 10 million vehicles on safety issues.
Toyota posted a net profit of 112.2 billion yen in the three months ended March, the height of the recall crisis, after recording a loss of 765.8 billion in the same period a year earlier.
The company's annual profit, helped by cost-cutting efforts and buoyed by stronger domestic demand, marked a turnaround from a loss of $4.4 billion the year before when it sank into the red for the first time.
While the results come as the car industry looks to be staging a recovery from the effects of the global downturn, Toyota's rebound has defied many expectations as it races to restore its battered reputation.
Toyota overtook General Motors in 2008 as the world's top car maker, but safety issues have raised questions about whether it sacrificed its legendary quality to become number one.
The beleaguered car giant faces a host of lawsuits over 'unintended acceleration' issues that have been blamed for 58 deaths in the US, prompting the majority of the recalls.
'We are still in a stormy environment,' Toyota president Akio Toyoda said. 'It was a year of being constantly on alert due to a series of recalls,' he said.
He said that this fiscal year marks a truly fresh start for Toyota and added that he would like to steer towards new strategies for growth, including expanding its lineup of hybrid models.
Despite the impact of the recalls, the car maker said it expected net profit to rise 48% to 310 billion yen, or $3.3 billion in the year to March 2011.
Toyota said earlier this month that US sales rose 24.4% in April from a year earlier as various incentives helped boost demand. For the year, global sales were down 7.7%, with those in North America down 8.9%, Toyota said.
But vehicle sales in Japan were 11.2% higher thanks to government buying incentives.
Analysts said the results show that the car maker may have navigated its way through the worst of its crisis. But they warned that looming litigation could potentially involve massive fines, as fresh questions over its recall process were raised in the US.
The US highway safety agency yesterday launched an investigation into whether Toyota appropriately notified it of a steering relay rod safety defect in its Hilux trucks.
Toyota issued a recall in Japan in 2004, but did not extend it to the US until 2005. US transport secretary Ray LaHood has refused to rule out the possibility of the Toyota being hit with another fine after it agreed to pay a record $16.4m in April to settle claims that it hid defects.
Ratings agency Moody's recently downgraded Toyota over concerns that product quality issues and the cost of litigation would dent its future profitability.
