Toyota’s Q2 operating profit skids on strong yen
TOKYO: Toyota Motor Corp yesterday said operating profit almost halved in the second quarter as the world’s top-selling automaker smarted from a strong yen that has made its Japan-built cars less competitive and crimped the value of overseas earnings.
Operating profit fell 43% to ¥474.6 billion (RM18.3 billion) in the July-September period compared with a year earlier. The result was roughly in line with the ¥476.26 billion average of 12 estimates from analysts surveyed by Thomson Reuters I/B/E/S.
While all Japanese automakers are feeling the currency pinch, Toyota is more exposed to swings in foreign exchange because it produces two-fifths of its vehicles in Japan, half of which it exports.
The latest yen squeeze also comes as sales in North America, one the world’s biggest auto markets, slow after record sales in 2015 that automakers and analysts saw as the peak of the US recovery from the 2008-2009 economic crisis.
Cheap fuel is also spurring demand for petrol-guzzling models leaving Japanese automakers struggling to raise production of sport utility vehicles and trucks.
Toyota has said it will make more of those larger vehicles including its popular RAV4 crossover model in the US, to take advantage of that shift in consumer preference.
Yesterday, Toyota also changed its full-year budgeted yen rate to 103 versus the US dollar and 114 to the euro, from 102 and 113 respectively. It lifted its forecast for full-year operating profit to ¥1.7 trillion from ¥1.6 trillion, which would be its lowest since 2013. – Reuters