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By Peter Stevenson MEMBERS of Volunteer Doctors Cyprus have treated around 350 people at their free clinic in Nicosia since it opened three months ago, while two more, one in Paphos and one in Polis are due to open today. Limassol also has a free clinic, which was opened only last month, and plans have been drawn ...
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SOME 10 days ago, foreign minister Ioannis Kasoulides raised expectations by announcing the possibility of a deal with Turkey for the opening of the fenced off area of Famagusta, for the return of its inhabitants. In exchange the Cyprus government would agree to the opening of Tymbou airport to direct flights. ...
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By George Psyllides PRIVATE auditors have expressed doubt the electricity authority (EAC) could be considered a going concern and have asked its board to draft a credible plan to tackle the problem, according to the auditor-general’s 2012 report on the semi-state company. Among other issues, ...
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Cyprus Internet Directory [ Toyota's $2 billion recall hit to keep it in the red ]

Toyota's $2 billion recall hit to keep it in the red

Toyota's $2 billion recall hit to keep it in the red
February 04, 2010 - Reuters

Toyota Motor Corp expects costs and lost sales from its massive safety recall to total $2 billion by the end of March, keeping it in the red for the year despite its strongest profit in six quarters.

Toyota's recall of more than 8 million vehicles due to problems with unintended acceleration has wiped out $30 billion in share value, hurt its reputation and overshadowed what until just two weeks ago had been expected to be an upbeat story of improving earnings.

"Toyota's recall this time is unlike any other in auto industry history," said Lee Sung-Jae, an analyst at Kiwoom Securities in Seoul. "The scale is huge to begin with, and this deals a fatal blow to the very core value Toyota represented -- that is the quality of its cars."

Automakers enjoyed a boost in demand in the latter part of 2009, thanks largely to government incentives designed to spur sales and improving access to credit as the global economy recovered.

Toyota was one of the biggest beneficiaries of the U.S. cash-for-clunkers scheme, allowing it to post its best quarterly operating profit since early 2008 in the three months to December.

But the world's largest automaker is now under investigation for its handling of the recall of a host of its most popular models including the Camry, Corolla and Rav4.

Up to 19 U.S. crash deaths over the past decade may be linked to accelerator-related problems at Toyota, congressional officials have said.

U.S. Transportation Secretary Ray LaHood said on Wednesday he would take the unusual step of calling Toyota President Akio Toyoda to emphasize how seriously the Obama administration is taking the investigations.

"Our ... people will hold Toyota's feet to the fire to make sure they are going to do everything they said they were going to do to make the vehicles safe," he said.


With less than two months left in the current financial year, Toyota slashed what most analysts had considered an excessively conservative operating loss forecast to 20 billion yen ($220 million) from 350 billion yen.

A Toyota official said the new forecasts for the current year took into account up to $2 billion lost from the recall -- an estimated 100 billion yen in costs and a further 70-80 billion yen in lost sales, in line with analysts estimates.

Senior Managing Director Takahiko Ijichi said the company was unsure about the impact beyond the end of this financial year, but investors expressed their concerns.

"The company's forecast earnings and profitability will surely decrease because of the recall," said Benedicte Mougeot, fund manager of HSBC's GIF Japanese equity fund in Hong Kong. "Taking into account the increased risk and reduced profitability, we will review our investment."

Shares in Toyota have lost as much as 23 percent in the last two weeks since and slid 3.5 percent to a 10-month closing low of 3,280 yen on Thursday. More than 56 million shares were traded, the most in at least a quarter of a century.

Toyota's new forecast for the year to March compares with a 38 billion yen annual loss forecast in a survey of 19 brokerages by Thomson Reuters I/B/E/S.

Toyota posted October-December operating profit of 189 billion yen, easily beating a 99 billion yen estimated by Thomson Reuters I/B/E/S. Its nine-month operating profit of 52 billion yen implies a 72 billion yen loss in Q4.


Investors have now turned their focus on how long and far the damage would go, with Toyota's sales in its most important U.S. market already falling 16 percent in January -- enough to knock it to third place, below Ford Motor Co.

Two congressional committees plan hearings this month on the Toyota recalls.

"I am in no way certain that Toyota's explanation for the cause of incidents of sudden acceleration in its vehicles satisfies me," John Dingell, a Michigan Democrat and longtime ally of the U.S. auto industry, said on Wednesday.

The developments underscored the increasingly political overtones of a safety crisis that has hit Toyota sales, and rocked confidence in a brand built on its reputation for quality.

In a further blow, Toyota is looking into dozens of complaints about inadequate braking on its new Prius hybrid on bumpy or frozen roads.

Toyota said on Thursday it had identified and fixed a software problem related to its anti-lock braking system. A Toyota quality official said depressing the brakes further would activate normal braking on the car, meaning the glitch was not legally considered a safety hazard.

"This issue shows that we may have fallen short of the standards expected of us by our customers," Hiroyuki Yokoyama said, declining to say whether an official recall was planned.

(Source: Financial Mirror,

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