Toyota Motor Corp, the world’s largest automaker, decided to positively modify its operating profit guidance – just as expected – given the fact that the continued depreciating value of the yen currency lifts overseas sales value, thoroughly offsetting a sales slump seen in Japan.
The yen’s decline has buoyed all Japanese companies – including the automakers – and has been a boon in particular for Toyota, which exports around 50 percent of the internally produced vehicles. Additionally, cost cutting strategies set in place during the years when the yen was hovering at record highs have also helped the company’s bottom line. The biggest Japanese carmaker now predicts record profit of 2.70 trillion yen ($22.93 billion) for the year ending March 31 – up 8 percent since the last forecast f 2.5 trillion yen and is also above average analysts estimates. A Reuters poll of 30 analysts saw the figure at 2.762 trillion yen. “This is the result of our efforts started during the strong-yen era to boost per-vehicle profitability and lower fixed costs,” commented Managing Officer Takuo Sasaki. The automaker also expects an improved operating profit margin of 10 percent, up from 9.4 percent that accompanied the last forecast.
When it comes to the third quarter results for the fiscal year (the October-December period), Toyota said it saw operating profit jumping 27 percent to 762.88 billion yen, and also changed its US dollar-yen exchange rate assumption to 109 yen for 2015, up from 104 yen. In America, which counts as Toyota’s largest market, the company has managed to jump ahead of its Japanese rivals, thanks to an extensive range of models. While Prius and other eco-conscious models were negatively impacted by the dropping fuel prices, the situation led to increased demand for Lexus luxury models, pickup trucks and other high-margin vehicles. The North American sales forecast for the year now stands at 2.75 million vehicles, though for other regions the forecast registered negative updates.