TOKYO: Toyota yesterday said it was on track for record $17.5bn full-year net profit, as Japan’s major automakers wrapped up a bumper earnings season, but a slowdown in Asia, including China, could slam the brakes on growth.
The world’s biggest automaker revised up its fiscal year profit forecast by 12.4 percent to 2 trillion yen ($17.5bn), and said revenue would come in at 26.5 trillion yen, as it saw strong results in North America. It also booked a 1.13 trillion yen net profit for the six months through September, from 1 trillion yen a year ago, while revenue rose 3.3 percent to 12.94 trillion yen.
The results came a day after rival Nissan said its half-year net profit rose 25 percent to 237bn yen and Honda last week reported a nearly 19 percent jump in its six-month net profit to 288.41bn yen.
The Japanese auto industry has benefited from the big-spending policies of Prime Minister Shinzo Abe, with huge monetary easing measures from the premier’s hand-picked team at the Bank of Japan helping push down the yen since last year.
A weaker yen boosts the competitiveness of exporters and inflates their repatriated overseas profits, although analysts say the effect has been waning in recent months. “The lower yen is undoubtedly a tailwind but factors other than that have not improved significantly from the first quarter,” said Credit Suisse analyst Masahiro Akita.
Nissan and Honda both warned over slowing sales in China.
Toyota reported a nearly 7 percent increase in the huge market, but half-year results were down in some other key Asian markets including Indonesia and Thailand, which has been hammered by political unrest, with sales tumbling 26 percent from a year earlier.
Japanese automakers’ sales in China fell off a cliff in late 2012 and into last year as a Tokyo-Beijing row over disputed islands sparked a consumer boycott of Japanese brands in the world’s biggest vehicle market. While demand has been recovering, rivals including General Motors and Volkswagen sought to capitalise on the diplomatic tussles by grabbing market share away from Japan’s top three automakers.
“I suppose there is still some of that (anti-Japanese sentiment), but they needed to justify their production cuts,” said Christopher Richter, an auto analyst at brokerage CLSA in Tokyo, referring to Nissan. “The other difficult spot has been Japan...(but) performance in the US has been good, so that’s good news for US-oriented makers like Honda and Nissan.”
Toyota’s North American unit sales rose 7.5 percent to 1.39 million and Europe saw a 1.78 percent increase to 414,217 vehicles. But half-year vehicle sales in Japan were down 6.4 percent at 1.03 million units, after an April sales tax rise dented consumer spending.
A series of huge vehicle recalls have also pushed up costs.
“We are preparing to replace the part with something of better quality. I will not comment on what Toyota would do in terms of its relationship with Takata,” Toyota Executive VicePresident Nobuyori Kodaira told a news briefing in Tokyo yesterday. AFP
