Toyoda Expects Two More Difficult Years

Toyota's new president Akio Toyota is expecting two more difficult years for both Toyota and the rest of the automotive sector but he emphasized that he established a plan to bring the Japanese manufacturer back to profitability. Currently hammered by the economic turmoil, Toyota is willing to return to profit by using only 70 percent of its production capacity and thus reduce costs to the minimum level.

"We want to do everything possible to avoid a third consecutive year of losses," Toyoda told reporters according to Reuters.

However, the company does not intend to close any plants for the time being, Executive Vice President Atsushi Niimi revealed, but lowering production levels at certain facilities might be a likely scenario.

"Right now, the market is very tough. But in two years, or at most three years, it will recover so we want to make sure we have the means to meet demand then," said Niimi.

While some auto analysts expressed their disbelief regarding Toyoda's plans to turn the Japanese manufacturer into a profitable companies, others are confident that Toyota could become a more powerful automaker in two years.

"The company will have to learn to adjust to this new paradigm of lower sales growth and higher technology spending. But they are definitely in a better position than U.S. companies to do so," said Yoji Takeda, a Hong Kong-based vice-president with RBC Investment Management (Asia) Ltd.

"Under the new management it will have to make continuous and rapid moves to cut costs. There could be some restructuring to cut down excess capacity. Toyoda's position as a member of the founder family may help push through changes faster. In two years it will be a much stronger company."