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Toyota Motor Corp. has launched the extraordinarily revamped 11th generation Toyota Corolla sedan at a celebration event inside Barker Hangar in Santa Monica, California. With the launch, the automaker intends to draw new buyers, particularly from China, and head off competition from the same class of vehicles such as Focus by Ford Motor (F - Analyst Report), Elantra by Hyundai, and Civic by Honda Motor (HMC - Analyst Report).
Toyota Corolla has a history of nearly 50 years with more than 40 million units sold since it was first introduced in Japan in 1966 in more than 150 countries.
The 2014 Corolla is equipped with 1.8-liter all-aluminum four-cylinder engines while its Eco version offers 1.8-liter engines with Valvematic – a valve train technology introduced on Corolla for the first time in North America. It has also adopted the new “Iconic Dynamism” design theme seen before on Toyota’s latest Avalon sedan.
The new Corolla also offers the interior volume of a midsize car as it comes with a near four inches longer wheelbase than the previous model and more legroom due to a thinner and more sculpted front seat. The Eco version is much more fuel-efficient giving more than 40 miles per gallon.
Toyota Motor recaptured the sales crown from General Motors Company (GM - Analyst Report) by selling 9.75 million vehicles globally in 2012, which exceeded GM’s sales of 9.29 million vehicles.
Toyota’s victory can be attributed to its impressive product lineups and marketing initiatives. The automaker lost its No.1 position to General Motors in 2011 after gaining the title from the same in 2008. The loss of crown was driven by declining reputation due to a series of safety recalls as well as negative impact from natural disasters in Japan and Thailand in 2011.
However, Toyota vowed to regain the top position by increasing its dependence on the non-U.S. markets, especially the high growth emerging markets. In 2012, the company reported an impressive 26.6% jump in sales to 2.08 million vehicles in the U.S. driven by strong sales across its lineups as it recouped the dealer lots with new vehicles.
Toyota plans to sell 9.91 million vehicles globally in this year, reflecting an estimated rise of 1.6% from 2012. It aims to generate 50% of global sales from the emerging markets by 2015, up from 45% presently.
Toyota posted earnings of ¥962.16 billion ($10.22 billion) or ¥303.78 ($3.23) per share in the fiscal year ended Mar 31, 2013, reflecting more than threefold increase from ¥283.56 billion or ¥90.20 per share in the prior fiscal year. However, earnings missed the Zacks Consensus Estimate of $6.26 per share for the year.
Consolidated revenues in the year escalated 18.7% to ¥22.06 trillion ($234.33 billion) on a 20.7% rise in unit sales to 8.87 million units. Unit sales rose 10.0% in Japan, 31.9% in Europe, 0.1% in Europe, 26.9% in Asia and 27.8% in Other reporting regions.
However, revenues were lower than the Zacks Consensus Estimate of $278.12 billion. Operating income increased nearly fourfold to ¥1.32 trillion ($14.03 billion) from ¥355.63 billion in fiscal 2012.
The improvement in revenues and profits was attributable to positive impacts from marketing activities of ¥650.0 billion ($6.90 billion), cost reduction activities of ¥450.0 billion ($4.78 billion) and currency fluctuations of ¥150.0 billion ($1.59 billion), partially offset by negative impact from related expenses of ¥300.0 billion ($3.19 billion).
Currently, shares of Toyota retain a Zacks Rank #1 (Strong Buy).