NEW YORK (AdAge.com) -- Toyota Motor Corp. is back in the black and appears to have survived its brand-damaging recall from earlier this year.
After two consecutive years of losses, the Japanese automaker today reported a $2.3 billion profit for the fiscal year that ended March 31, compared to a loss of $4.8 billion last year. Surprisingly, Toyota was buoyed by its fiscal fourth quarter (January through March), which coincided with the height of its recall of more than 8 million cars for faulty accelerator pedals and other issues, as it reported a profit of $1.2 billion for that quarter alone.
"I feel that, given these earnings, we are finally standing at the starting line. I believe that this fiscal year marks a truly fresh start for Toyota, and I would like to steer the helm towards new strategies for growth," Toyota President-CEO Akio Toyoda said in remarks to reporters, investors and dealers before the earnings were announced, calling it "a year of being constantly on alert due to the series of recall matters, which caused concerns to you."
Toyota also forecast a $3.3 billion profit for the fiscal year that began April 1 and ends March 31, 2011.
The company said the gains were a result of an improving world economy and an uptick in the U.S. auto market, but it made little mention of its cost-cutting and buyer incentives in the wake of the recall. According to TrueCar.com, Toyota's true cost of incentives per vehicle totaled $847 in 2007. That number skyrocketed to $1,967 per car sold through the first three months of this year.
Toyota has already spent more than $2 billion on the recall due to the sticky pedals and other safety defects, and it said it lost almost 100,000 vehicle sales from customers who were reluctant to purchase one of its cars. And the car company is not out of the woods yet. On Monday, the National Highway Transportation Safety Administration launched yet another investigation into Toyota -- at least the ninth such probe since the recall came to light in late January -- to determine whether the company waited almost a year to recall nearly 1 million trucks in the U.S. for a steering issue after it had already recalled the same vehicles in Japan in 2004.
The NHTSA already levied a $16.4 million fine against Toyota for the sticky accelerator problem, the largest fine the agency is allowed to impose.
Mr. Toyoda said, "Going forward, Toyota aims to maintain sustainable growth by optimally distributing resources through identification of the areas where it would want to advance. Toyota will progress by constantly checking not to overreach itself, and by balancing investment in future growth and improvement of the profit structure."