The financial impact on Toyota from its global recall could total more than $5 billion, due to increased incentive campaigns, litigation costs and marketing efforts by the embattled car maker, analysts say.

The critical question facing the world's leading car maker is how long the fallout from the recall will affect sales in North America, its largest market. After a slow start, Toyota is biting back at its critics and has launched an aggressive sales campaign in the U.S., featuring a 0% interest five-year loan offer, competitive lease prices and free maintenance across 80% of its vehicle line-up.

Despite the onslaught of negative media coverage from late January, Toyota's marketshare in the U.S. only slipped to 12.7% in February from just above 14% the previous month. "The fact that Toyota slipped by only 130 basis points from January to February was pretty impressive," said Kurt Sanger, autos analyst at Deutsche Bank in Tokyo. "How much they can rebound and at what cost will be critical going forward."

Toyota is still set to report a net profit for the fiscal year ending March 31 of 80 billion yen, or about $886 million, reversing a net loss of 437 billion yen the previous year, its first loss in 59 years.

"As there is less than a month left for this fiscal year, the impact won't be significant. But it will severely weigh from the next fiscal year. It is hard to say if Toyota will be able to post a profit easily in the next fiscal year," said Tatsuya Mizuno, analyst at Mizuno Credit Advisory.

.Toyota itself has factored in a recall cost of 180 billion yen for the current fiscal year, the only public estimates the company has given of the toll from the current firestorm surrounding the manufacturer. But analysts say total costs going forward will be much higher. A Toyota spokesperson Tuesday declined to comment on analysts' estimates of its costs from April 1, 2010.

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