TOKYO/OSAKA: Toyota Motor Corp, Japan’s biggest automaker, predicted it will make a record profit for a second year, as a weaker yen boosts the value of high-profit Lexus luxury models and sport utility vehicles (SUVs) sold abroad.
Net income for the year ending in March may reach ¥2 trillion (RM58.49 billion), up from its previous forecast of ¥1.78 trillion, the Toyota City, Japan-based company said yesterday in a statement. The carmaker made an unprecedented profit of ¥1.82 trillion last fiscal year.
President Akio Toyoda steered the company founded by his grandfather back to industry-leading profits even before it became a leading beneficiary of Japan central bank stimulus aimed at defeating deflation. The monetary easing has driven the yen down to a near seven-year low, which should help the automaker rack up more earnings from record SUV sales in the United States and improve the competitiveness of its expanding Lexus line-up.
“The impact of the yen’s depreciation is big on automakers’ earnings results,” Takashi Aoki, a Tokyo-based fund manager at Mizuho Asset Management Co, said by phone before Toyota’s statement. “For Toyota, it could only be a benefit.”
Toyota rose 0.1% to ¥6,808 at the close in Tokyo before the company announced earnings.
Toyoda, 58, has called for a period of sustainable growth for the company after years of over-expansion leading up to his becoming president in 2009. That year, Toyota reported its first operating loss in more than seven decades and began recalling millions of vehicles for problems related to sudden unintended acceleration, blemishing its quality record.
While Toyota has fallen behind competitors including VW in markets such as China, it’s keeping pace with an expanding US market by making small investments to boost production of models such as the Highlander SUV built in Indiana.
The Highlander and RAV4 SUVs are part of a consumer shift from cars in the US as gasoline prices fall below US$3 (RM10) a gallon for the first time in almost four years. In August, RAV4 deliveries outnumbered those of the Corolla compact, the highest-volume model in Toyota’s history.
Lexus’ US deliveries have climbed 14% this year through October, outpacing Bayerische Motoren Werke AG’s BMW and Daimler AG’s Mercedes-Benz. — Bloomberg
A new Highlander being unveiled at the New York Auto Show in March 2013. The Highlander and RAV4 SUVs are part of a consumer shift from cars in the US as gasoline prices fall. Photo by Reuters.
This article first appeared in The Edge Financial Daily, on November 6, 2014.