Toyota Motor Corp., the world’s largest carmaker, may trail Honda Motor Co. in profit for a third straight year as lingering consumer concerns over recalls crimp its recovery.

Net income may more than double to 490 billion yen ($6 billion) in the 12 months ending March 31, compared with a previous forecast of 350 billion yen, the Toyota City, Japan- based company said in a statement yesterday. Last week, Tokyo- based Honda raised its forecast 6 percent to 530 billion yen, reported Bloomberg.

Even as a U.S. economic recovery and rising demand in emerging markets help Toyota, the company expects to earn less than a third of the record 1.7 trillion yen it made in the year ended March 2008. While the enduring impact of record recalls damp President Akio Toyoda’s efforts to engineer a rebound, Honda has been boosted by its motorcycle business and greater resilience to the stronger Japanese yen.

“Toyota is still carrying the negative impact from the recalls and is struggling with its profitability compared with other carmakers,” said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo.

Toyota was the only major carmaker to post a decline in U.S. sales last year as the overall market gained 11 percent. The company’s deliveries fell 0.4 percent to 1.76 million vehicles, while Honda’s sales rose 6.9 percent to 1.23 million.

Separately, the U.S. government said it found no link between electronics in Toyota’s vehicles and sudden acceleration incidents after a 10-month study. NASA, the U.S. space agency, was asked by the National Highway Traffic Safety Administration to conduct a technical review that found only mechanical errors as the likely cause of unintended acceleration.

Toyota shares rose 4.6 percent to 3,650 yen as of the 11 a.m. trading break in Tokyo.

Honda is getting closer to where its profitability level was before the 2008 financial crisis triggered by the collapse of Lehman Brothers Holdings Inc., Honda Chief Financial Officer Yoichi Hojo said last week. Its U.S. factory utilization rate is back to about 85 percent compared with 75 percent a year ago, he said.

To insulate itself from fluctuating yen-dollar rates, Honda also relies on North American-built autos for a higher proportion of its U.S. sales. In 2010, 87 percent of the vehicles Honda sold in North America came from plants in the U.S., Canada and Mexico, while 67 percent of Toyota’s U.S. sales were of models built in North America, according to data from the carmakers.

Ford Motor Co., the most profitable U.S. carmaker, earned $6.56 billion in the year ended in December.

Volkswagen AG, the biggest European automaker, may post 2010 profit of 4.85 billion euros ($6.6 billion), based on the average of eight analyst estimates compiled by Bloomberg in the past 28 days. Daimler AG may have earned 4.84 billion euros, according to the average of nine estimates.

Nissan Motor Co., Japan’s second-biggest automaker, posts its quarterly results later today.

For the fiscal third quarter, Toyota’s net income fell 39 percent from a year earlier to 93.6 billion yen. Profit dropped after the Japanese government ended a subsidy program for fuel- efficient models in September and the yen reached its highest level since 1995 in November.

“Toyota lags behind others in terms of profit recovery, but with the U.S. market coming back, the company will produce and sell more vehicles, which will help it cut costs,” said Kohei Takahashi, an analyst at JPMorgan Chase & Co. in Tokyo.

Toyota revised its outlook for the yen’s exchange rate against the dollar to 86 yen from 85 yen. The yen traded at 82.36 to the dollar as of 11:25 a.m. in Tokyo after reaching a 15-year high of 80.22 on Nov. 1.

Every 1-yen appreciation of Japan’s currency against the dollar erodes about 30 billion yen from Toyota’s earnings, according to the carmaker. Honda, which produces more than 70 percent of its vehicles outside Japan, loses 17 billion yen for each 1-yen gain in the currency.

Auto sales in Japan may benefit from new models including the updated Vitz compact and Lexus CT200h hybrid, Toyota said yesterday.

The company said sales in Asia, excluding Japan, rose 21 percent to 335,000 units in the quarter ended Dec. 31. In China, sales may rise to 900,000 vehicles this year from 840,000 last year, Toyota said yesterday.

The maker of Highlander sport-utility vehicles now expects to sell 7.48 million autos globally in the year ending March 31, up from its earlier forecast of 7.41 million.

Toyota cut selling, general and administrative costs by 12 percent in the third quarter. The automaker also lowered full- year capital expenditure, depreciation and research and development spending targets, Senior Managing Director Takahiko Ijichi told reporters in Tokyo yesterday.

“Our cost-cutting efforts are moving faster than expected,” he said.

The carmaker has continued to issue recalls for various defects as it seeks to regain customer trust. The company said Jan. 26 it would repair 1.7 million vehicles globally because of faults in fuel pipes and pumps, pressure sensors and spare-tire carriers. The announcement came after the carmaker recalled more than 8 million vehicles for problems linked to unintended acceleration.

WASHINGTON – After dissecting Toyota’s engine control software and bathing its microchips in every type of radiation engineers could think of, federal investigators found no evidence that the company’s cars are susceptible to sudden acceleration from electronic failures, the government said Tuesday.

The National Highway Traffic Safety Administration concluded that the sudden acceleration was caused by mechanical problems in some Toyota models — sticking accelerator pedals and floor mat interference — that it had previously identified as causes, reported The New York Times.

The findings, reached after a 10-month investigation, neither implicated Toyota nor exonerated it any further than had been the case after the earlier investigation.

Toyota eventually recalled more than 11 million Toyota and Lexus vehicles globally because of floor mats and sticky accelerator pedals. It also paid three fines totaling $48.8 million, because, the Transportation Department said, Toyota had not reacted appropriately to reports of problems.

“The jury is back,” said Ray LaHood, the transportation secretary. “The verdict is in. There is no electronic-based cause for unintended high-speed acceleration in Toyotas. Period.”

An engineer from the National Aeronautics and Space Administration, brought in to help conduct the inquiry, was slightly less categorical but still emphatic.

“It’s very difficult to prove a negative,” said Michael T. Kirsch, a principal engineer with NASA’s Engineering and Safety Center. But the electronic system for throttle controls in Toyotas would require two separate sensors to fail simultaneously in such a way that neither created an “error code” in the vehicle’s onboard computer.

There were relatively few instances of even one sensor failing, said Mr. Kirsch, who added that investigators had access to Toyota’s designs, engineering and warranty data.

Mr. LaHood and other officials were also quite diplomatic about a likely cause of the unintended accelerations — pushing on the accelerator instead of the brake. On Tuesday department officials called these “pedal misapplications,” and when a reporter asked if the problem was drivers making a mistake, Mr. LaHood shot back from the podium, “Nobody up here has ever insinuated the term that you used, driver error.”

In a statement, Steve St. Angelo, Toyota’s chief quality officer for North America, said the automaker hoped the study would help put to rest questions about the reliability of Toyota’s electronic systems.

Shares of Toyota rose 4 percent to close at $88.57, gaining momentum as news of the report leaked out ahead of the announcement on Tuesday afternoon.

The government said it was considering new research, on “the placement and design of accelerator and brake pedals, as well as driver usage of pedals, to determine whether design and placement can be improved to reduce pedal misapplication.”

It is also considering proposing rules, this year, that would require a standard method to turn off the engine so the driver does not have to insert a key into the ignition. It is also considering a requirement for “event data recorders,” a step it has long resisted. Many cars already have such recorders, simplified versions of an airplane’s “black box,” which capture data in the last few seconds before airbags are deployed, and keep information like engine speed, brake and accelerator application, and power of impact.

Wade Newton, a spokesman for the Alliance of Automotive Manufacturers, which represents most of the large carmakers, said his group did not oppose a requirement for the recorders. “Our biggest concern would be making sure there was proper lead time — particularly for automakers that have previously elected to not install E.D.R.’s in their vehicles,” he said. “They’ll need extra time for designing, engineering, fine-tuning and working with supply chain issues to put these devices into autos.”

The findings of the Toyota investigation were similar to those of a preliminary government report released in August. In fact, the finding vindicated not only Toyota but the safety agency itself.

“N.H.T.S.A., America’s traffic safety organization, was right all along,” Mr. LaHood said. He said the Transportation Department had ordered the search for an electronics problem because in the hearings on Capitol Hill, at which he testified last year, “just about every member of Congress didn’t believe that we had found the problem, which was floor mats and the sticky pedals.”

“As a former member of Congress, I thought we should listen to these members,” said Mr. LaHood, who represented a district in Illinois until President Obama named him transportation secretary. Speaking of his former colleagues, he said, “I hope they get the message today.”

In claiming victory, though, Mr. LaHood was far different in his tone toward Toyota than he was last year when news of the acceleration problems broke. At one point, during a Congressional hearing, Mr. LaHood said that owners of recalled Toyotas should stop driving the vehicles if they were having a problem and take them back to the dealers, though he quickly backtracked.

On Tuesday he praised Toyota for its plans to establish a $50 million safety center in Michigan.

In a statement, the highway agency said that NASA engineers had evaluated the electronic circuitry in Toyota vehicles and analyzed more than 280,000 lines of software code for any potential flaws that could initiate unintended acceleration.

As with the report on Tuesday, the preliminary examination given to Congress in August found no evidence of flawed electronics in vehicles that crashed. That examination found only one instance in which an accelerator pedal became trapped under a floor mat and none in which a pedal became stuck or sprang back too slowly.

The recalls have marred Toyota’s reputation for high quality and safe vehicles, hurting sales for much of the year. Toyota said its sales were down 0.4 percent in 2010; it was the only full-line automaker to report lower sales last year.

In response to complaints, Toyota has begun to install a brake override system, which allows the brake to stop the vehicle even if the accelerator is pressed simultaneously, as standard equipment across its lineup by the end of this year. The company also set up a panel so customer complaints are relayed more quickly to headquarters.

General Motors Co. and Toyota Motor Corp. boosted incentives for U.S. customers in January, helping them to two of the biggest sales gains in the industry.

GM increased spending on marketing promotions by $498, or 16 percent, to an estimated $3,663 per sold vehicle, according to researcher Autodata Corp.

Toyota, which halted deliveries a year earlier due to a recall, raised spending 24 percent to an estimated $1,962 a sale, The Detroit News reported.

While discounts such as rebates or below-market interest rates on loans can increase sales volumes and market share, they also reduce average sale prices and can decrease profits.

The incentives offered by Toyota and Detroit-based GM helped the companies match or outpace the industry’s 17 percent gain in sales volume in January.

“As more buyers enter the market, the trick is going to be keeping transaction prices up because that’s been profitable for the industry,” said Alan Baum, an analyst at industry consultant Baum & Associates in West Bloomfield.

“GM’s got to realize that’s their goal.”

Auto incentive spending throughout the U.S. industry in January rose less than 2 percent to $2,579 per vehicle, according to Woodcliff Lake, New Jersey-based Autodata.

Chrysler Group LLC’s average was $3,414, a decrease of 1.3 percent from a year earlier.

Ford Motor Co. reduced average incentive spending 11 percent to $2,407.

Industrywide light-vehicle sales ran at a seasonally adjusted annual rate of 12.6 million in January, exceeding analysts’ estimates and matching the market’s fastest pace in 17 months.

GM’s sales rose 22.7 percent last month while Toyota had a 17 percent gain in January.

By increasing use of incentives, GM and Toyota City, Japan-based Toyota risk starting a price war that would hurt profits, Brian Johnson, an analyst at New York-based Barclays Capital, wrote Wednesday in a research note. They are already facing higher commodity costs.

“GM’s use of targeted incentives may mark, in our view, a dangerous first salvo in a heretofore quiet pricing front,” Johnson wrote in a note titled “Is this how price wars start?”

Nissan Motor Co., Japan’s second-largest automaker, reduced U.S. incentives 16 percent to $2,510, while Honda Motor Co., the third-largest Japanese car company, boosted discounts 41 percent to $2,016.

Chrysler’s sales were up 22.7 percent in January, and Ford sales were up 13.2 percent.

Hyundai sales spiked 22 percent; Nissan’s were up 14.8 percent; and Honda sales climbed 13.2 percent in January compared to the same month in 2010.

Toyota Motor Corp. plans to produce more vehicles without increasing capital investments as Volkswagen AG attempts to surpass it as the world’s largest carmaker by 2018.

“We are challenging ourselves to produce more even as we restrain capital spending,” President Akio Toyoda said yesterday at the North American International Auto Show in Detroit.

The carmaker plans to keep annual capital spending at about 700 billion yen ($8.46 billion) for at least the next five years, Executive Vice President Atsushi Niimi said Dec. 24. With more efficient processes, the Toyota City, Japan-based carmaker seeks to be as productive as when it spent more than twice that three years ago, he said.

“There have been companies that have gone belly-up for carrying excess capacity, but no company has gone bankrupt for not being able to produce,” Niimi said. “We now realize humbly that we shouldn’t make cars until we’re absolutely certain they will sell.”

Toyota is spending less on expanding capacity after the global financial crisis caused its first loss in almost six decades and problems tied to unintended acceleration prompted a year of record recalls, reported Bloomberg. The company plans to invest 3.5 percent of revenue in new plant facilities this year ending in March, compared with 5.6 percent in the year ended March 2008.

From around 2003, Toyota’s pace of production growth was excessive as the company invested in new plants and facilities, Niimi said. “We’ve been admonished to never let this happen again,” he said.

Now, the company will shift focus to implementing leaner manufacturing methods, such as paint lines that are 25 percent shorter and engine production that is no costlier when output is half of earlier levels, Niimi said.

Shares in the automaker rose 0.1 percent to 3,460 yen as of the 11 a.m. trading break in Tokyo. The stock fell 17 percent in 2010.

Toyota said Dec. 21 it plans to increase global production 1 percent to 7.7 million units in 2011.

By limiting expansion, Toyota’s improved factory operating levels and lower depreciation costs will lead to higher earnings, said Edwin Merner, president of Tokyo-based Atlantis Investment Research Corp.

“Toyota is a very well-managed company,” he said. “You should see a very good improvement in profit margins.”

Volkswagen plans to spend 41.3 billion euros ($53.5 billion) in new property, plant and equipment in the next five years, $10 billion more than its Japanese rival. Wolfsburg, Germany-based Volkswagen’s capital spending will equal about 6 percent of sales during the period, according to the company.

“We want to make Volkswagen the world’s most future-proof automotive group,” Chief Executive Officer Martin Winterkorn said in November.

Volkswagen has a goal of surpassing Toyota in sales and profitability by 2018.

“Whether a certain company has the No. 1 volume position is not for us to decide,” Toyoda, the company’s president, said yesterday. “It’s up to the customer.”

Toyota isn’t restraining spending on research and development and will allocate 760 billion yen toward new models and technology for the fiscal year ending in March, Toyoda said.

That’s 4.7 percent higher than the 725.35 billion yen Toyota spent on research and development through March 2010, according to Bloomberg. The carmaker’s research and development spending budget peaked at 958.88 billion in the fiscal year ended March 2008.

While Toyota’s sales will recover in the U.S., the company will and should focus its expansion in emerging markets, Merner said.

Toyota will start building Corolla compacts at a new plant in Changchun, China, in the first half of 2012. The factory will build 100,000 Corollas a year.

In September, Toyota said it is spending $600 million on a third plant in Brazil. Production of 70,000 units a year of a new compact model will begin there in the second half of 2012.

The company also is investing $1.3 billion on a new plant in the U.S. to increase production of Corolla compacts. Toyota will begin installing assembly equipment at the facility in Blue Springs, Mississippi, with a goal of starting output by late 2011, the company said in June.

The Mississippi plant eventually may be used to produce the Prius, Toyoda said yesterday, without elaborating.