Toyota Exec Says Rising Yen Issue Trumps Auto Recall Cost (TM)by Chip Brian
12/4/2009-According to comments made by Toyota Motor (NYSE:TM) Executive Vice President Yukitoshi Funo, the automaker's biggest fear isn't costs from its massive US gas pedal recall, but rather the effects of the surging yen.
Funo said that while the expense of a massive recall, like the 4 million one announced last week, was considerable it was dwarfed in comparison to the companies other costs.
However, when discussing the recent surge of the yen, Funo showed more caution, as the dollar has fallen to a 14-year low at 84.81 last week.
Strength in the yen has an adverse effect on the firms overseas income.
Recently, Toyota, maker of the Prius hybrid and Lexus Luxury vehicles, has looked to the China market to offset weakness in its US sales.
Toyota currently sells about 700,000 vehicles per year in China, and that figure has continued to grow, but it still lags behind Volkswagen AG and General Motors in the Chinese market.
Analysts, on average, are projecting a loss of $0.26 per share for the current year, but expect the world's largest automaker to swing to a profit of $3.12 next year.