Toyota Hopes To Reduce Losses With China Sales

YURI KAGEYAMA

TOKYO (AP) — Toyota Motor Corp., the world's top automaker, reports earnings for the fiscal second quarter on Thursday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Toyota posted its worst ever loss in the financial year ended March, and is expecting the flow of red ink to continue this fiscal year. Adding to the automaker's crisis is an investigation into floor mats in its vehicles sold in the U.S., which are suspected of jamming the gas pedal and causing crashes. The problem is likely to affect 3.8 million vehicles, including its top-selling Camry. A recall could be costly, and it could also damage Toyota's pristine image for quality. Toyota has declined comment except to say it is fully cooperating with U.S. authorities in an ongoing investigation. On the bright side, Toyota is benefiting from strong sales in China and other emerging markets. Demand is surging for its Prius hybrid in Japan, thanks to tax breaks and government incentives.

BY THE NUMBERS: Toyota is expecting a 450 billion yen ($5 billion) loss for the fiscal year through March 2010, worse than the 350 billion yen ($3.9 billion) loss in the previous fiscal year. Like other Japanese exporters, Toyota is hurt by a strong yen. The dollar has recently hovered around 90 yen. Akio Toyoda, grandson of the company's founder who became president this year, has vowed to avoid a third straight year of red ink.