Toyota to Cut Capital Spending in FY 2008

Tokyo, Apr 26, 2008; Jiji Press reported that Toyota Motor Corp. has decided to lower its capital spending in the current fiscal year by about 10 pct from the previous year to cope with an earnings setback stemming from the stronger yen and rising raw material prices, according to informed sources.

The top Japanese automaker plans spending of just under 1.4 trillion yen for the year that ends next March, the sources said. In the preceding three years, the company spent about 1.5 trillion yen annually on equipment and facilities on the back of strong growth in its global vehicle sales.

As it braces for profit drops in the current year, Toyota intends to reduce costs for maintaining offices and to use its money chiefly to streamline manufacturing lines, according to the sources.

But the automaker will maintain a high level of capital spending in the key North American market, since production is due to start for the RAV4 sport-utility vehicle in Canada as early as October and for the Highlander SUV in Mississippi in 2010, the sources said.