Toyota Motor Corp. said Wednesday it expects to book group operating profit of ¥1.8 trillion for the current business year, up 36.3 percent from the year before, on the back of the weaker yen and brisk sales in North America and Asia.
The projected operating profit will be the highest since it posted its largest-ever profit of ¥2.27 trillion in the business year ended in March 2008 before the so-called Lehman shock in September 2008.
Japan’s largest automaker said it expects group net profit to rise 42.4 percent from fiscal 2012 to ¥1.37 trillion on sales of ¥23.5 trillion, up 6.5 percent.
The earnings improvement came as the dollar further appreciated against the yen to around the ¥95 level as of March, compared with the company’s earlier projection of above ¥80.
“The long-standing yen appreciation has been finally corrected,” Toyota President Akio Toyoda said at a news conference in Tokyo. “Also, the world’s new-car demand is expected to grow going forward, driven by the recovery of the U.S. market and the expansion of the emerging markets.”
While the weakening yen is bolstering profits, Toyoda is facing a resurgent Detroit as General Motors, Ford and Chrysler offer their best lineup of vehicles in a generation. Toyota’s market share in the U.S. has fallen to a 15-month low and deliveries in China have fallen for three straight quarters.
“There’s no guarantee the weaker yen will last,” said Yuki Sakurai, president of Fukoku Capital Management Inc., which oversees about ¥1.5 trillion in Tokyo. “So it’s difficult to take for granted that earnings will rise in the coming years.”
Toyota also said it booked a net profit of ¥962.1 billion in the fiscal year to March, up from ¥283.5 billion a year earlier, on sales of ¥22.0 trillion, an increase of 18.7 percent on-year.
The rosy annual profit underscores the recovery among Japan’s major automakers after the 2011 quake and tsunami devastated sales and production, and highlights strong demand in the key Asian and U.S. markets.
The yen, which has lost about one-fifth of its value against the dollar since November, has also helped, boosting Japanese firms’ competitiveness overseas and jacking up the value of their repatriated foreign income.
The declining yen was among the factors cited by Toyota for its profit jump, after Honda said its net profit for the year to March soared 73.6 percent thanks to robust overseas sales, a weaker yen and cost cutting.
Toyota, which last year overtook General Motors to regain the title of world’s biggest automaker, also said it expects to earn a net profit of ¥1.37 trillion for this fiscal year.
“We experienced increased sales of our vehicles mainly in North America and Asia,” Toyoda said, also pointing to “companywide profit improvement activities.”
Global vehicle sales hit 8.87 million units in the year to March, Toyota said, despite nearly flat results from recession-riddled Europe.
The company added that vehicle sales in the current fiscal year are on track to hit 9.1 million units.
However, Japan’s three biggest automakers — Toyota, Nissan and Honda — have seen results dented by the fallout from the bitter territorial row between Tokyo and Beijing that fueled a consumer boycott of Japanese products.
Toyota did not make specific reference to the Senkaku dispute in its earnings statement Wednesday but has previously said it would take a hit from the diplomatic battle.