TOKYO: Toyota on Wednesday raised its earnings forecast for the year to March, saying it expects to book a record $18.1 billion annual net profit thanks to a weak yen and cost cuts.
The revision marked the second upgrade for the fiscal year to March as the world’s biggest automaker lifted its net profit estimate to 2.13 trillion yen from an earlier 2.0 trillion yen forecast.
The Corolla and Camry maker also said sales would come in at 27 trillion yen, up from an earlier 26.5 trillion yen forecast.
Operating profit would be 2.7 trillion yen, against a previous 2.5 trillion yen estimate, it added.
“While we expect a reduction in vehicle sales, we are raising our operating income forecast . . . factoring in the change in our foreign exchange rate assumption and the progress in our profit improvement activities, such as cost reduction efforts,” Toyota’s managing officer Takuo Sasaki said in a statement.
Also Wednesday Toyota said it booked a 1.7 trillion yen net profit for the nine months through December, up from 1.5 trillion yen a year earlier.
Revenue rose 5.2 percent to 20.1 trillion yen in the period.
Japanese car companies have been big winners over the past year as a sharp drop in the yen inflated their repatriated profits, while sales demand has also picked up in the key North American market.
“We expect Toyota to benefit from both developed market recoveries and emerging market growth,” Barclays said in report before the earnings were published.
“[The company] is building a highly lucrative operating structure while continuing long-term development/investment,” it added
In Japan, nine-month sales declined to 1.53 million units from 1.64 million vehicles, as consumer demand continued to be hit by a sales tax rise last April—Japan’s first in 17 years.
In North America, however, sales rose 7.4 percent to 2.11 million units.
“In the US, we expect a new-model offensive to support volume growth reining in sales costs amid a firm overall demand recovery,” Barclay’s said.
Toyota also enjoyed sales gains in Europe, but results in Asia slowed.
Last month Toyota retained the crown of world’s biggest automaker after saying it sold a record 10.23 million vehicles in 2014, outpacing General Motors and Volkswagen.
Toyota’s upbeat announcement on Wednesday comes despite the firm struggling to recover its reputation for safety after the recall of millions of cars around the world for various problems, including an exploding air bag crisis at embattled supplier Takata.
Rival Honda last week cut its full-year profit forecast as it grapples with soaring recall costs, including from the exploding airbag crisis linked to at least five deaths.
Toyota has also put on hold the building of new factories until early 2016, as it focuses more attention on the quality of sales rather than volume.
Among the moves, Toyota is pushing further into the fast-growing market for environmentally friendly cars, especially in China where the government is struggling to contain an air pollution crisis. AFP
Toyota was swamped by domestic orders for its first mass-market hydrogen Mirai fuel-cell car, with demand in the first month nearly four times higher than expected for the whole year.
It has also announced plans to develop components for hybrid vehicles with two Chinese automakers in an unprecedented technology-sharing deal aimed at increasing green car sales in the world’s biggest vehicle market.
The deal marked a shift away from Japanese carmakers’ traditional reluctance over such deals for fear of losing their competitive edge.
Previously, Toyota would make key components such as batteries and motors in high-cost Japan and then ship them to joint ventures overseas. But that drove up the price of models such as its Prius, which has seen sluggish sales in China.
Japan’s number two car company Nissan reports its financial results next week.