Toy­ota lifts full-year profit fore­cast on weaker yen

The Star Malaysia - StarBiz - - Foreign News -

TOKYO: Toy­ota Mo­tor Corp raised its fore­cast for full-year op­er­at­ing profit by 4.3% as it ex­pects a boost from a weaker yen, af­ter on­go­ing sales growth in Asia and Europe lifted profit in the July-Septem­ber quar­ter.

Ja­pan’s top au­tomaker ex­pects full-year profit to come in at 2.4 tril­lion yen (US$21.18bil), from a pre­vi­ous fore­cast of 2.3 tril­lion yen, based on a re­vised as­sump­tion that the yen will av­er­age around 110 yen to the US dol­lar through March.

The in­crease rep­re­sents largely flat profit in the year to March ver­sus last year.

Profit was 579.1 bil­lion yen for the Ju­lySeptem­ber pe­riod, up 11% for Toy­ota’s strong­est sec­ond-quar­ter per­for­mance since the Septem­ber 2015 quar­ter, though it un­der­shot a me­dian fore­cast of 584.89 bil­lion yen from 10 an­a­lysts polled by Refini­tiv.

Earn­ings were bol­stered by higher sales in China, while prof­itabil­ity in most of its ma­jor mar­kets in­clud­ing North Amer­ica im­proved.

The re­sults in­di­cate that Toy­ota is man­ag­ing to avoid a fall in sales in China just as its global ri­vals are start­ing to feel the pinch of stalling de­mand for cars in the world’s big­gest auto mar­ket, as broader eco­nomic growth slows.

Dur­ing the July-Septem­ber quar­ter, it posted a 20% jump in sales in China, which helped to lift over­all sales in Asia by 9.2% to 417,000 units dur­ing the pe­riod.

Last week, Honda Mo­tor Co Ltd re­ported a slow­down in ve­hi­cle sales in Asia largely due to slug­gish­ness in China, while Ford Mo­tor Co in late Oc­to­ber posted a slide in third-quar­ter profit due in part to a sales slump in the coun­try.

Toy­ota and its do­mes­tic ri­vals are fac­ing the pos­si­ble need to in­crease in­vest­ment in North Amer­ica, as Ja­pan’s auto in­dus­try con­sid­ers ways to in­crease lo­calised pro­duc­tion fol­low­ing the agree­ment on an up­dated trade pact be­tween the United States, Canada and Mex­ico in Septem­ber.

The in­dus­try is also brac­ing for likely higher US tar­iffs on im­ports from Ja­pan, which could de­liver a neg­a­tive hit to Toy­ota, as it im­ports nearly one-third of all of the ve­hi­cles it sells in the United States, its big­gest mar­ket, from Ja­pan.

Toy­ota’s sales in North Amer­ica eased a touch to 665,000 units, while they rose 4.8% in Europe, re­sult­ing in a 1.9% rise in sales glob­ally.

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