TOKYO, July 22 (UPI) -- Japan's economy is on the road to recovery, thanks to a surge in exports and aggressive cost-cutting as well as restructuring efforts by companies. But one of the biggest winners of the recent upturn in growth prospects isn't the Japanese government. Rather, it's the country's biggest car manufacturer, which is now also the second-largest auto maker in the world.
Toyota Motor Co. reported Tuesday that it would raise both its production and sales targets for 2004, amid strong sales within Japan and overseas. Indeed, the company expects sales worldwide to rise 9 percent compared to last year's 6.61 million units, up 280,000 units from its initial forecast in December. Meanwhile, global production will be raised by 11 percent from a year ago to 6.74 million units, up 230,000 units from the earlier forecast.
"In the first half (of this year), Toyota sold more vehicles in all regions and we hope to expand our record sales this year ... we have so much growth potential because there are factories that haven't even started operating," said company president Fujio Cho.
The Toyota group includes Daihatsu Motor and Hino Motors. For the group as a whole, Toyota expects vehicle sales worldwide to reach 7.39 million this year, up from the 7.01 million it projected late last year. It anticipates production to rise to 7.54 million units, above the 7.28 million units it had initially anticipated.
Toyota's growth had been strong even amid the sluggish economy, as the company reported its fourth-straight year of record-breaking income levels, and it hopes to continue that winning streak for the current fiscal year ending March 2005. In 2003, the company sold a total of 6.49 million cars to dealers and distributors, while rival U.S. manufacturer Ford Motor Co., with which it competes for the title of the world's second-biggest car maker, sold 6.72 million units.
The gap between Ford and Toyota, however, is expected by many industry analysts to be narrowed further and the Japanese car maker's second place completely secured soon as Ford Motor reported a loss in its automotive operations last year. Indeed, Ford's chief financial officer Don Leclair said Tuesday that the company expects a more competitive market in the latter half of this year.
Meanwhile, Toyota will be expanding its manufacturing base in the United States as well as China next year. Indeed, Texas Governor Rick Perry made a point Tuesday to highlight his state's relations with the Japanese auto maker. In a speech in San Antonio, where Toyota has a plant, the governor said that the company's investments worth $800 million to the city will lead to 2,000 jobs directly with the company, and thousands more in spin-off jobs.
Nevertheless, Toyota is not completely immune from potential problems. The company is currently looking into the possibility of hiring some employees of scandal-ridden rival car manufacturer Mitsubishi Motors. Moreover, it is analyzing the potential of doing business with some of Mitsubishi's suppliers as the company closes down a plant in Okazaki, southern Japan, to cut down costs.
Some car analysts said that the Japanese government is urging Toyota to help out ailing Mitsubishi Motors, and that hiring some of the plant's 1,600 employees won't be a sound business decision. The Okazaki plant is slated to be shut down next year as Mitsubishi admitted earlier this year to hiding defects in their products even though the company had faced a similar scandal four years ago.
"We are now studying things to come up with an answer," said Toyota's executive vice president Ryuji Araki.
