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Toyota ups profit forecast on yen fall

Bloomberg

Toyota Motor Corp., Asia’s biggest carmaker, on Friday raised its full-year profit forecast by 8 percent, as the weaker yen bolsters the value of Japanese cars sold overseas.

Net income in the year ending next March will probably climb to a six-year high of ¥1.48 trillion, and exceed the previous ¥1.37 trillion forecast, the carmaker said. For the quarter that ended in June, profit jumped 94 percent to ¥562.2 billion, beating the ¥441.2 billion average of four analysts’ estimates compiled by Bloomberg.

While Toyota was outsold by General Motors Co., Japan’s largest automaker earned triple GM’s profit last quarter, as Prime Minister Shinzo Abe’s efforts to weaken the yen benefit Japanese exporters by bolstering the value of products sold overseas. After years of battling a recall crisis, strong yen and natural disasters, analysts project the maker of the Camry sedan will earn record profit next fiscal year.

“Toyota is on very solid footing now, it has more opportunities; more tailwinds than headwinds,” said Ashvin Chotai, London-based managing director of Intelligence Automotive Asia. “The yen is no longer a headache for them, and they should see a good boost in their key markets.”

Toyota shares rose 3.4 percent to close at ¥6,430 before the earnings announcement. The shares have climbed 61 percent this year, outperforming all major global automakers, after the yen began weakening late last year.

Operating profit, or sales minus the cost of goods sold and administrative expenses, climbed 88 percent to ¥663.4 billion, beating the ¥649 billion average estimate. Revenue rose 14 percent to ¥6.26 trillion, compared with the ¥6 trillion average analyst estimate.

The maker of the Corolla and Camry sedans has been projecting since May for net income to surge 42 percent to a six-year high of ¥1.37 trillion.

Honda, Toyota U.S. surge

LOS ANGELES
Bloomberg

Honda Motor Co. and Toyota Motor Corp. led U.S. volume gains in July for Asia-based automakers as they battled for midsize sedan sales leadership amid intense competition from Ford Motor Co. and Nissan Motor Co.

Honda beat analysts’ estimates with a 21 percent increase. Toyota’s deliveries rose 17 percent, matching expectations and topping Ford’s for the first time in more than three years. Nissan’s 11 percent gain trailed estimates, and combined sales for South Korean affiliates Hyundai Motor Co. and Kia Motors Corp. grew 4.5 percent, more than anticipated.

Low interest rates and competitive leases, particularly on midsize models such as Toyota’s Camry, are helping boost U.S. auto sales as the economy strengthens. Industry demand remains on pace for its best showing in six years as consumers replace the oldest cars and trucks ever on U.S. roads.

“Camry held onto the top spot in the top-selling segment in the country, but it came with a price,” said Jessica Caldwell, an analyst at Edmunds.com. “Camry incentives are at their highest level in nearly two years” and are four times more than those of Honda’s Accord, she said.

Toyota offered incentives averaging $2,581 for each Camry sold in July, compared with $627 per Accord, said Edmunds.com, a vehicle pricing and data company in Santa Monica, California.

Honda’s gain was the best among large-volume carmakers, contributing to a 14 percent increase in industrywide sales to 1.32 million light vehicles, according to Autodata Corp. Along with demand for Camrys and Accords, U.S.-based automakers’ more-competitive cars and fuel-efficient pickups are driving demand.

The increases for Toyota, Honda and Nissan gave Asia-based automakers a 47.5 percent market share in July, according to Woodcliff Lake, New Jersey-based Autodata.

July sales of Toyota, Lexus and Scion models totaled 193,394, the company said Thursday in a statement. That edged Ford’s 193,080 cars and light trucks, ranking Toyota behind only General Motors Co. in U.S. volume for the first time since March 2010, according to Autodata.

Sales of Camry, the best-selling U.S. car for more than a decade, rose 16 percent to 34,780. Toyota has said it expects to sell at least 400,000 of the model this year. While incentives have risen, they aren’t out of line for Camry, said Bill Fay, group vice president for U.S. Toyota sales.

Honda delivered 141,439 Honda and Acura vehicles last month, and its increase surpassed the 16 percent average estimate of seven analysts surveyed by Bloomberg. The gain for the Tokyo-based automaker helped rank it fourth in U.S. sales, ahead of Chrysler Group LLC. That hadn’t happened since April 2011, according to Autodata.

Nissan’s sales set a company record for the month. Deliveries of the Yokohama-based automaker’s Altima midsize car rose 11 percent, and its Pathfinder SUV more than tripled.