Toyota's annual sales top ¥30 trillion, a first for a Japanese firm

Toyota Motor Corp. became the first Japanese company to report annual sales topping ¥30 trillion, thanks in large part to brisk sales in China.

Group sales reached a record ¥30.23 trillion in fiscal 2018, a 2.9 percent increase from fiscal 2017, but this fiscal year sales are projected to dip 0.7 percent to ¥30 trillion, Japan’s largest automaker said Wednesday.

The company forecast lower growth in operating profit for the current year based on an expected drop in revenue and weaker vehicle sales in Japan and North America, underscoring the hard task ahead as it gears up to face a rapidly shifting industry.

Toyota said it expects profit to rise 3.3 percent to ¥2.55 trillion ($23.20 billion) in the year through March 2020, slightly lower than the ¥2.61 trillion average of 23 analyst estimates compiled by Refinitiv and compared to last year’s 20 percent jump.

A weakening yen against the dollar is boosting Toyota and other Japanese exporters’ repatriated profits. Toyota based its forecasts on an exchange rate of ¥110 to the dollar.

The automaker, like its rivals, is facing stiff competition as ride-sharing technology and the race to develop self-driving cars has caused rapid — and costly — disruption to the auto industry. And there is also a major shift under way toward electrified vehicles, forcing carmakers to invest billions of dollars in new technologies. Toyota’s bets in transport services, which include stakes in Uber Technologies Inc. and Grab, will take a long time to yield financial returns.

U.S. President Donald Trump’s threats to raise tariffs and auto parts have pushed Toyota to step up investments in the U.S. The company added about $3 billion to a multiyear plan, with the automaker now planning to invest almost $13 billion over a five-year period ending in 2021.

Trump said on April 28 that Prime Minister Shinzo Abe, who visited him last month, agreed to put “$40 billion into the United States for new car factories.”

Toyota is carefully balancing its pledges in the U.S. and its growth plans in China, where it became the fastest growing global carmaker last year. Toyota plans to boost China sales by 8.5 percent to 1.6 million units in 2019, and this week it approved a $1.64 billion investment to expand one of its Chinese joint ventures’ new-energy vehicle capacity by 400,000 units per year.

Toyota’s sales in the U.S., its largest market, fell 4.4 percent in April. Sales in China surged 20 percent to a record 142,600 units in the same month.

While it forecast global group retail sales at a record 10.74 million vehicles for the current year, compared with 10.6 million in the previous year, Japan sales were seen down 1.2 percent and North American sales down 1.6 percent.

The sales figures include vehicles sold by its subsidiaries, small-car manufacturer Daihatsu Motor Co. and truck maker Hino Motors Ltd.