Behind the Wheel with Phil Lebeau

Toyota Withdraws Guidance, Honda Commits to CR-V

For Akio Toyoda, the CEO of Toyota, 2011 can't end soon enough. This has been one of the worst years ever for the Japanese automaker. And that's saying something after a disastrous 2010 filled with millions of vehicles being recalled and the safety of Toyota vehicles being questioned. But for Akio, you play the hand your dealt, or in this case, the strong yen being dealt.

Tuesday, after releasing quarterly earnings that were down more then 18 percent on revenue declining 5 percent, Toyota has withdrawn guidance for full year earnings guidance.

That's due to the uncertainty brought on by the production delays tied to the Thai flooding. But the bigger issue for Toyota is the strong yen.

In layman's terms it's killing the Japanese automaker's profits and it's unclear the auto maker can do much to change that situation. Sure, Toyota is sourcing more parts from local suppliers outside of Japan, and is trying not to export as many models. Still, Toyota has committed to building 3 million vehicles in its home country and won't break from that pledge, even as the yen strengthens.

So CEO Akio Toyoda is caught between a rock and a hard place. Given the importance of Toyota in Japan it can not afford to cut production and jobs, even if that may be the smart move financially. So Toyota will have to ride out the strong yen, which is expected to stay above the level Toyota has targeted to be competitive.

Honda Increasing Production:

Meanwhile, Honda says it expected to gradually bring production in North America back above 50 percent as it deals with parts and product shortages in Thailand.

The company is still a ways from seeing full production in its North American plants, but it is sourcing parts through other suppliers.

Honda has also said the redesigned 2012 CR-V will hit showrooms before the end of the year and will not be delayed indefinitely, as the company previously announced.



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