Toyota forecasts record profit on Trump tax cut

Toyota Motor Corp. predicted a record profit this fiscal year helped in part by President Donald Trump's tax cuts and surging sales of the updated Camry sedan and RAV4 sport-utility vehicle in the US

A reduction in expenses through cost cuts and a favorable foreign exchange environment is also helping the carmaker lift its annual net income forecast to a record 2.4 trillion yen ($22 billion), beating analyst estimates. Asia's biggest automaker also boosted its projection for vehicle sales.

President Trump's tax cuts have helped a record number of companies to raise their profit guidance, according to strategists at JPMorgan Chase & Co. Toyota, which is setting up a new plant in the US, said it would gain about 292 billion yen from the tax reforms. Toyota's Japanese rival Honda Motor Co. also last week raised its profit forecast for the year because of the reduction in tax rates.

Toyota said last year it's saving costs through measures including the continued roll out of a new manufacturing process. The money spared will help bolster spending on research and development to a record 1.06 trillion yen this year as president Akio Toyoda pushes the company deeper into new electrified powertrains and artificial intelligence, areas he says the automaker needs to lead.

America's love for SUVs also reverberated through Toyota's earnings. While boosting sales of the RAV4 SUV, Toyota also retained its status as the maker of America's best-selling car last year with the redesigned Camry. The Japanese carmaker captured 14.5% of the US market in January, second only to General Motors Co.'s 17.2%,

according to researcher Autodata.

Toyota raised its forecast for North American sales this fiscal year to 2.81 million vehicles from 2.79 million. That made up for slight

downward revisions

Japan and Europe.

Toyota projects research and development spending at a record 1.06 trillion yen this fiscal year, even

for

sales

in

as it cuts costs in other areas. In December, the carmaker announced plans to have at least 10 batteryelectric vehicles in its lineup by the early 2020s, from zero now.