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Toyota aims half of sales in emerging markets by 2015

11 march 2011, 05:32
Akio Toyoda presents Toyota Global Vision ©AFP
Akio Toyoda presents Toyota Global Vision ©AFP
Japanese auto giant Toyota said Wednesday it aims to make half of its global sales in emerging markets by 2015 and is looking for an operating profit of 1 trillion yen ($12 billion) "as soon as possible", AFP reports.

Unveiling the company's "Global Vision", company president Akio Toyoda said he wanted China to eventually account for 15 percent of its global sales.

Toyota's new plan is aimed at marking a new chapter for the world's largest automaker after it was hit by the double whammy of the global financial crisis and millions of recalls that have tarnished its once stellar reputation.

It identified emerging markets and environmentally friendly cars as the key pillars of its new strategy.

In 2010 emerging markets made up 40 percent of Toyota's sales.

"By increasing our sales in emerging markets, (Toyota wants to) achieve a balanced sales portfolio among Japan, the United States, Europe and emerging markets," the company said.

The company has set its sights on achieving an operating profit of about 1 trillion yen as soon as possible, nearly double the 550 billion yen operating profit it is projecting for the current fiscal year.

It is aiming for a five percent operating profit margin "as soon as possible" even in what it called a tough business environment.
To help achieve its aims, the automaker will reduce the number of its board directors to 11 from the current 27.

The reduction is seen as an effort to speed up decision making, after Toyota last year announced steps to reshape global operations to improve the recall process.

In 2008 Toyota ended General Motors' 77-year reign as the world's largest automaker, but since then the Japanese giant has faced the impact of the economic crisis, recalls, a shrinking domestic market and a strong yen.

On Friday it suffered a fresh setback when ratings agency Standard & Poor's downgraded the carmaker to "AA-" from "AA", citing "weak profitability".

Previously lauded for its safety, Toyota became mired in crisis when it recalled nearly nine million vehicles between late 2009 and February last year due to brake and accelerator defects linked to deadly accidents.

As criticism mounted of its slow response and bureaucratic inflexibility, Toyota tightened its recall policy and has pulled around 16 million units since late 2009 over a range of issues.

Like other Japanese exporters, the auto giant is grappling with a strong yen that makes its products less competitive overseas amid fierce rivalry with manufacturers in emerging markets such as China.

By David Watkins

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