KAI RYSSDAL: Here comes one of those good news, bad news stories. Toyota reported yet another year of record profit today. That would be the good news. The bad is that those profits weren’t quite as much as everybody had expected. And the company says things are going to be even slower next year.
We asked Marketplace’s Alisa Roth to find out what’s really going on with the world’s soon-to-be-largest automaker.
ALISA ROTH: Toyota’s profit grew nearly 9 percent in the first quarter. And its profits for the fiscal year, which ended in March, were up almost 20 percent.
But the company’s playing down its success, warning investors that profits will likely grow by a measly less than 1 percent in this fiscal year.
Toyota’s blaming the “severe market” in North America for its doom-and-gloom projections. North America accounts for more than half the company’s profits.
Ron Harbour of Harbour Consulting says consumers are worried about the general state of the economy and high gas prices, and are hesitating before they buy new vehicles.
RON HARBOUR: Maybe I’ll just defer that decision, because I’ve got to figure out whether this is going to last longer term or not. And if it does, maybe I’ll buy a different car than what I had in mind. Or a different truck.
He says that hesitation is affecting all carmakers. Plus, some analysts say the shaky housing market means fewer contractors buying pickups and fewer homeowners refinancing to buy new cars.
But consultant Michael Robinet of CSM Worldwide says Toyota’s also spending a lot of money right now.
MICHAEL ROBINET: Toyota is currently launching a number of new facilities. They are expanding their portfolio into new segments, and with that comes some risks.
In any case, Toyota tends to be cautious about predicting its own success, so it could well end up beating expectations anyway
In New York, I’m Alisa Roth for Marketplace.
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