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Toyota upbeat despite recent sluggish sales

By Kyung Lah, CNN
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Profits down, outlook up for Toyota
STORY HIGHLIGHTS
  • Sales slump in third quarter of fiscal year, but still strong for last 9 months overall
  • Executives: safety recalls and unfavorable exchange rate hurt profits
  • Toyota forecast net profit for fiscal year at 490 billion yen, or US $5.98 billion

Tokyo (CNN) -- Rebounding from safety recalls and an unfavorable exchange rate, Toyota released an upbeat financial forecast with three months left in the fiscal year.

Executives at the world's largest automaker said net profits nearly quadrupled between April and December when compared to a year ago, but have slowed in recent months.

Toyota saw sluggish sales in the third quarter, with net income falling to 93.6 billion yen (US $1.1 billion) from 153.2 billion yen (US $1.87 billion) -- a 38.9% drop as compared to the third quarter of last year.

Toyota executives blamed the rollback of government incentives for green cars, which hurt the automaker's Prius sales, and the effects of the strong yen.

The yen has strengthened approximately 15% compared to the U.S. dollar during the fiscal year, eating into company profits when funds are repatriated.

But strong sales earlier in the year offset the third quarter drop in sales.

Gradually, we hope that we are winning back our customers' confidence in us and our cars.
--Takahiko Ijichi, Toyota
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Net income for the first nine months of the fiscal year increased almost 300% when compared to the year before. Toyota forecast a net profit for the fiscal year at 490 billion yen, or US $5.98 billion.

The automaker says even with a stronger financial picture for the company, it is only about "half way recovered" from the worldwide safety recalls over the past year.

"Gradually, we hope that we are winning back our customers' confidence in us and our cars," said Takahiko Ijichi, Toyota's Senior Managing Director. "But the journey is not yet completed,"

Toyota executives would not speculate on Tuesday's release of a 10-month investigation by the U.S. National Highway Transportation Safety Administration. The study was commissioned by NHTSA and led by the U.S. space agency, NASA, to investigate sudden acceleration in Toyota and Lexus vehicles.

Thousands of drivers, primarily in the United States, complained that their Toyota cars experienced sudden acceleration, which in some cases caused fatal accidents. The investigation primarily seeks to answer whether Toyota electronics had any part in the cause of the sticky gas pedals.

"As soon as we get the results of the investigation, we will scrutinize the content," said Shigeru Hayakawa, Toyota's Managing Officer.

Toyota's Paul Nolasco said Toyota has paid $48.8 million in fines to the U.S. government for issues with its floor mats and accelerator pedals.

Last month, Toyota recalled 1.7 million vehicles worldwide for fuel leaks.