Toyota Retrenches in Australia - Analyst Blog


Toyota Motor Corp. ( TM ) announced that it will downsize its Australian workforce in order to cope up with the falling production level, strong Australian dollar and global economic uncertainty. The automaker will cut 350 jobs out of 4,700 people it employs in the country.

Toyota's production level in Australia plunged 36% in 4 years from 149,000 vehicles in 2007 to an expected 95,000 vehicles in 2012. Apart from Toyota, the Australian automotive industry comprises Ford Motor 's ( F ) division, and Holden - a division of General Motors ( GM ).

The Australian government has been trying to soothe the ailing condition of the industry with government subsidies and tariff supports. Despite this, maintaining the manufacturing jobs in the country has become extremely difficult.

Last month, Toyota announced its sales and earnings guidance for fiscal year ending March 31, 2012. The automaker expects to record a profit of ¥180 billion ($2.3 billion) for the year, which is less than half compared with the previous forecast of ¥390 billion made in August and the year-ago profit of ¥408.18 billion.

The company also expects revenues of ¥18.2 trillion ($234.4 billion) on global sales of 7.38 million vehicles for the year. This compared with the previous revenue forecast of ¥19 trillion on sales of 7.6 million vehicles and the year-ago level of ¥18.99 trillion on 7.31 million vehicles.

Toyota believes severe floods in Thailand during the second half of 2011 will reduce the operating profit by ¥120 billion ($1.5 billion). Meanwhile, the company considers strong yen to hit operating profit by ¥190 billion ($2.4 billion) for the full year.

The company expects yen to average 78 against the dollar for the year, down from ¥80 in its previous forecast. Meanwhile, it assumes an exchange rate of ¥109 against the euro, down from ¥116 in the previous forecast.

However, the Zacks #2 Rank (Buy) company aims to achieve a 20% growth in global sales to 8.48 million vehicles in 2012 on the production of 8.65 million vehicles, up 24% from 6.97 million in 2011.

Toyota also expects to sell 8.95 million vehicles in 2013 by manufacturing 8.98 million vehicles. The estimated sales are higher than 8.43 million vehicle attained by the company in 2007. The estimates do not include sales by group companies such as Daihatsu Motor Co. and Hino Motors.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: F , GM , TM

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