Toyota Motor Corp. on Tuesday revised upward its group operating profit projection for fiscal 2013 through March to a record ¥2.4 trillion from an earlier estimated ¥2.2 trillion, boosted by the yen’s slide and cost-cutting steps.
The full-year operating profit estimate eclipses the previous record of ¥2.27 trillion marked in fiscal 2007 before the global financial crisis that erupted in 2008.
Japan’s top automaker also raised its group net profit estimate for the business year to ¥1.9 trillion, up from the previously projected ¥1.67 trillion, on sales of ¥25.5 trillion, up from ¥25 trillion forecast in November.
Toyota benefitted from the yen’s depreciation, as its operating profit rises by ¥40 billion for every ¥1 decline against the dollar. The dollar has traded well above the ¥100 mark against the company’s assumed annual exchange rate of ¥97 set in November.
The revised projections now assume the dollar will average ¥100 in the full business year.
The buoyant results underscore a recovery not only for the world’s biggest automaker but also for rival Japanese auto giants, including Nissan and Honda.
The trio have been big winners over the past year as a sharp drop in the yen inflated exporters’ repatriated profits, further boosted by improved overseas demand in key markets, including the United States and China.
China sales fell off a cliff in late 2012 and into last year as a Tokyo-Beijing diplomatic row sparked a consumer boycott of Japanese brands in China, the world’s biggest vehicle market.
Relations remain tense, but Japanese manufacturers have said their dented sales are coming back to pre-spat levels.
“In addition to the positive impact of the weaker yen, our operating income increased due to marketing efforts, such as increased vehicle sales and cost-reduction activities,” Toyota managing officer Takuo Sasaki said.
Last month, Toyota kept the title of world’s biggest automaker with calendar 2013 sales of 9.98 million vehicles, outpacing Germany’s Volkswagen and General Motors, and said it expects this year to become the first automaker to break the 10 million vehicle sales barrier.
For the April-December period, the company reported a consolidated operating profit of ¥1.86 trillion, up 126.8 percent from a year earlier and a group net profit of ¥1.53 trillion, up 135.4 percent. Its sales grew 17.8 percent to ¥19.12 trillion.
Despite the buoyant figures so far, an April sales tax hike in Japan and possible slowdown in key U.S. and Asian markets could put the brakes on sales, said Takaki Nakanishi, analyst and CEO at Nakanishi Research Institute in Tokyo.