Nissan sees annual profit falling 7.7% on higher raw material costs
- Author: Carolyn Briggs May 11, 2017,
May 11, 2017, 10:49
Toyota expects group sales to drop 0.4% and operating profit to fall by almost 20% this fiscal year, for a second straight year of decline.
Japan's March trade data showed exports rose at the fastest pace in more than two years as increased shipments of auto parts and steel signalled that expanding overseas demand could help boost the country's notoriously slow economic growth. High costs and currency fluctuations affected results. Toyota warned it expected profits to drop to 1.5tn yen (£10.1bn) for the 2018 financial year as a result.
Toyota also expects a negative impact of 110 billion yen to its operating profit this year from an assumption that the yen will average around 105 yen against the U.S. dollar.
Toyota said adverse currency movements erased 940 billion yen from its operating profit. Operating income, excluding the impact of valuation gains/losses from interest rate swaps, decreased by 470.7 billion yen to 1.206 trillion yen.
Japanese automaker Toyota's profit fell 6.6 percent in the fiscal fourth quarter as an unfavorable exchange rate offset better sales, but its president said Wednesday that the company was merely investing in the future.
"I feel a strong sense of crisis about whether or not we are actually executing car-making from the perspective of the customer in all Toyota workplaces, from development, production, procurement and sales, all the way to administrative divisions", Toyoda said.
Lagging auto sales in the USA, a lucrative market, hurt Toyota's bottom line for the fiscal year that just ended.
The Corolla and Prius hybrid maker posted a profit of 1.83 trillion yen ($16 billion) on slightly lower revenue of 27.6 trillion yen for the recently ended year to March - well down from a record 2.31 trillion yen net profit the previous year.
However, he acknowledged that the company can become more efficient. For this, the company launched the Toyota Compact Car Company, last year, which specialises in compact cars, made Daihatsu a wholly owned subsidiary, and established a compact car company for emerging markets.
Operating profit in Japan surged 56 percent to 508.2 billion yen ($4.57 billion) in the fiscal fourth quarter ended March 31.
But the Japanese auto industry is facing uncertainty over Trump's drive to support USA firms over foreign imports, a stance that has raised fears of a possible global trade war.
Regional wholesale volume in North America was flat at 2.8 million vehicles for the full fiscal year, but North America kept its position as Toyota's biggest market.
In Japan, vehicle sales totaled 2,273,962 units, an increase of 214,869 units.