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Toyota logs record profits for April to December, hikes full-year outlook

Kyodo, Bloomberg

Toyota Motor Corp. said Friday it booked record-high profits for the April to December period and raised its full-year forecast on strong sales in North America.

Analysts say the results mean the auto giant is still on track to become the first Japanese company to top ¥3 trillion ($25.7 billion) in annual operating profit.

The world’s top automaker reported that group net profit rose 9.2 percent in the nine months from a year earlier to ¥1.89 trillion, and operating profit grew 9.0 percent to ¥2.31 trillion on sales of ¥21.43 trillion, up 6.5 percent and another record.

“Expectations have been really high for Toyota,” Koji Endo, an analyst with Advanced Research Japan, said by phone. “Even if their profit has to come down next year, their profitability will still be their second-highest anyway. The U.S. market is very strong and the Chinese market seems to be recovering.”

Toyota revised its outlook for net profit upward for the year through March 31 to ¥2.27 trillion from an earlier estimate of ¥2.25 trillion, a 4.4 percent increase on the previous year.

Its outlooks for fiscal 2015 operating profit and sales remained unchanged at ¥2.8 trillion, up 1.8 percent, and ¥27.5 trillion, up 1.0 percent, respectively.

Thursday’s figures, however, do not reflect the impact from Toyota’s decision Monday to suspend all domestic output because of a recent steel plant explosion in Aichi Prefecture.

A solid economy and cheaper gasoline prices in the United States are acting as a “tailwind” for automakers, Toyota Managing Officer Tetsuya Otake said at a news conference.

But he also said he would keep a close watch on the fallout from the suspension.

“We will monitor (the impact of) the suspension of our plants and uncertainties about the outlook for emerging markets,” he said.

Toyota sold 6.49 million cars globally in the nine months through December. Sales in North America gained thanks to cheaper gasoline prices brought about by the plummet in crude oil prices, but sales fell in Europe and Asia including Japan.

For fiscal 2015, Toyota expects to have sold 10.05 million vehicles worldwide, up from 10 million projected in November.

But Toyota’s period of prosperity hasn’t stopped it from shaking things up. It plans to discontinue the Scion brand targeting young American buyers in August, re-badging all but one model as Toyotas, while buying out Daihatsu Motor Co. for about ¥389 billion in stock to make it a wholly owned subsidiary. The goal will be to transform Daihatsu into a global brand for small cars as popular as BMW AG’s Mini.

Toyota also is looking to deepen its partnership with Mazda Motor Corp. The two companies have assembled a panel to study potential alliances for low-emissions cars and other technologies, Tetsuya Fujimoto, an executive officer at Mazda, said Thursday. Toyota already owns stakes in Subaru maker Fuji Heavy Industries Ltd. and truck makers Hino Motors Ltd. and Isuzu Motors Ltd.