Toyota reports Q1 loss; lifts forecasts

Toyota Motor Corp, hit hard by the devastating earthquake in Japan, reported its first quarterly loss in two years as production fall and a strong yen hit exports as well as profits.

The company, however, raised its profit forecast for the next quarter and the full year as the supply constraints have eased and the market improved.

Toyota, the world's biggest automaker, hopes to start unrestricted production in September, about two months ahead of the previous forecast.

The developments in the US and the declining dollar will, however, continue to squeeze margins as Toyota exports more than half of its vehicles produced in Japan.

Toyota, which makes the popular Prius and Camry sedans, made an operating loss of 108 billion yen ($1.4 billion) in the April-June quarter, compared to a 211.7 billion yen profit a year earlier.

Toyota posted a net profit of 1.2 billion yen compared to a 190.5 billion yen net profit in the previous year. Revenue fell 29.4 per cent to 3.44 trillion yen.

For the full year to March 2012, Toyota expects its operating profit, which excludes earnings from China, to rise to 450 billion yen.

Toyota, meanwhile, is in a race with rivals such as South Korea's Hyundai Motor Co to slash costs by roughly 30 per cent and yet offer quality products at competitive prices.

The main worry for Toyota, however, is the strong yen, which currently rules around 77.7 to the dollar. However, a wholesale shift of production outside Japan is unconceivable for Toyota as of now.