Time To Look At Toyota? (TM)

Toyota Motors TM said that it intends to double profit by 2015, which could make shares very attractive at these levels.

The company said that it will focus more on emerging markets for sales, as well as have an additional 10 hybrid models to help it achieve its goal.

The comapny also said it would cut its board from a massive 27 members to 11 members to speed up decision making.

Toyota President Akio Toyoda said the company would also eliminate one layer of management, and give each geographic region a bigger role. "From now, we aim to build a strong base for generating profits....so that even under tough conditions with the dollar averaging 85 yen and sales of 7.5 million units, we can book an operating margin of 5 percent and an operating profit of about 1 trillion yen," Toyoda said.

"This means that even if we are hit with a major economic downturn again and sales fall about 20 percent, we will still be able to post profits. This is the bottom line of our sustainable growth plan."

The company wants to have an operating profit of 1 trillion yen ($12 billion) and a profit margin of 5% "as soon as possible" before 2015. This is sharply higher than the forecast it put forth for this financial year of a profit of 550 billion yen and margin of 2.9%.

The company trades at a high valuation, around 23 times forward earnings, but if the company is able to successfully achieve a doubling of profits in the new few years, shares could be cheap at these levels, especially as it continues to focus on its lead in hybrids. The company currently has 14 hybrid models, and with the 10 it intends to add, would far outpace its competitors, like BMW, Ford F, and General Motors GM in this market.

"It shows Toyota is staking its betsin the next 5-10 years that hybrids are going to be the key to market share," said Stuart Pearson, analyst at Morgan Stanley in London.

"I'm sure Toyota will keep their lead in hybrids in the near-term, in terms of volume at least."