Tokyo: Toyota Motor Corp, the world's largest carmaker, raised its full-year profit forecast as sales in Asia grow more than estimated, outweighing the impact of a stronger yen.
Net income may total 350 billion yen (Dh15.78 billion) for the 12 months ending March 31, compared with an earlier estimate of 340 billion yen, the Toyota City, Japan-based company said in a statement on Friday.
Net income in the fiscal second quarter rose to 98.7 billion yen from 21.8 billion yen a year earlier.
Toyota follows Honda Motor Co and Nissan Motor Co in boosting earnings forecasts as a recovering global economy spurs sales. That's helping President Akio Toyoda, grandson of the company's founder, withstand the yen's advance to near a 15-year high against the US dollar and the lingering effects of record vehicle recalls for defects tied to unintended acceleration.
"Toyota's double-digit sales growth in Japan, China and Southeast Asia is driving profit gains," said Koji Endo, an auto analyst at Advanced Research Japan in Tokyo.
The carmaker's shares rose 1.9 per cent to close at 2,964 yen in Tokyo trading before the earnings announcement. The stock has declined 24 per cent this year, compared with a seven per cent drop at Honda and a 50 per cent gain at South Korea's Hyundai Motor Co.
Outlook on yen
The company revised its outlook for the Japanese currency to 85 yen against the dollar from 90 yen. A stronger yen erodes profit gains by reducing the repatriated value of overseas sales.
"We said at the end of last fiscal year that we've established a production structure profitable at 90 yen producing seven million cars globally," Satoshi Ozawa, an executive vice president at Toyota, said today in Tokyo. "We've now been able to lower the break-even point even further."
Even as Toyota struggled to rebuild its reputation after recalls that began late last year, profit in the three months ended September 30 surged from a year earlier after sales gained by about 90,000 vehicles in Japan, 62,000 in other Asian markets and 58,000 in emerging markets including Latin America, Africa and the Middle East.
Sales plunged by 41,000 vehicles in Europe and 3,000 in North America in the second quarter, the automaker said.
Government subsidy
As Toyoda, 54, tries to regain customers' trust after the acceleration-related problems, the company has continued to recall models for separate faults. On Thursday, Toyota said it will recall about 135,600 Passo and iQ cars in Japan and Europe to fix the vehicles' electronic power-steering system.
The carmaker also faces falling demand in Japan after a government subsidy programme ended September 8. Toyota's domestic sales plunged 24 per cent in October.
"What worries me more than the recalls is a shaky global economy and fallout from the end of government subsidies," said Yuuki Sakurai, chief executive officer of Fukoku Capital Management in Tokyo.
