CAPE TOWN: Toyota says its nine-month net profit jumped nearly 10 percent to 1.9-trillion yen ($16-billion), despite falling sales in most regions, with the world’s top automaker focused on squeezing more productivity out of its plants.
The automaker also slightly raised its fiscal year profit forecast to 2.27-trillion yen while it trimmed its annual sales forecast. Unit sales were down in most regions, including Europe and Japan, the company said, but not in North America. The region has out stood for Japanese automakers, with rival Honda recently saying it was a bright spot that helped offset sluggish sales at home.
Toyota and its domestic rivals have benefited from healthy growth in the US where low interest rates are proving a boon to consumers, although the Federal Reserve’s possible plans for more rate hikes this year could dampen demand. Weakening demand in emerging markets such as Thailand and Indonesia, as well as a planned consumption tax hike in Japan next year, could also eat into sales, analysts said.
“A further slowdown in emerging economies may affect [Toyota’s] sales overseas, and an expected rate hike in the United States would dampen customers’ appetite,” said Shigeru Matsumura, analyst at SMBC Friend Research Center.
“These are potential risks.” The figures come after Toyota last month kept the title of world’s top automaker for the fourth straight year after saying it sold 10.15 million vehicles globally in 2015, driving past Volkswagen and General Motors. In the first half of 2015, the German giant, whose other brands include Porsche and Audi, was set to take the crown as it rode momentum in emerging economies.
But then it posted its first drop in annual sales for more than a decade after being hammered by a massive pollution cheating scandal. “Volkswagen is in a severe situation,” said Rakuten Securities analyst Yasuo Imanaka. “Japanese automakers can take advantage of the rival’s slump by winning VW customers. The scandal could be a plus for Japanese firms.”
