Business / Corporate

Toyota first-half profit hits record ¥1.27 trillion on sales in Asia and Europe

Kyodo, AFP-JIJI

Toyota Motor Corp. said Thursday its group net profit in the April-September half rose 2.6 percent from a year earlier to a record ¥1.27 trillion ($11 billion), helped by robust vehicle sales particularly in Japan, China and Europe.

“As a result of our work to improve ourselves, many people chose Toyota vehicles. The latest results show that,” Executive Vice President Mitsuru Kawai said in a news conference. “We are grateful.”

Japan’s largest automaker said its consolidated operating profit rose 11.3 percent to ¥1.40 trillion as group sales grew 4.2 percent to a record ¥15.29 trillion on brisk sales in Japan, North America and Europe.

For the full year to March 2020, Toyota maintained its earnings outlook and said it expected a group net profit of ¥2.15 trillion, up 14.2 percent.

The company also kept its outlook for group operating profit at ¥2.40 trillion, down 2.7 percent, and its projection for sales at ¥29.50 trillion, down 2.4 percent.

Factors including cost reductions and marketing helped outweigh negative impacts from foreign exchange rates, contributing to operating profit, it said in a statement.

Toyota assumed an exchange rate of ¥107 to the dollar, compared with ¥106 in its previous estimate.

It also announced it would buy back up to 34 million of its stock, or 1.19 percent of its outstanding shares, for up to ¥200 billion by the end of the business year.

“Toyota is enjoying steady global sales although competition is intensifying in the global auto market,” Satoru Takada, auto analyst at research and consulting firm TIW, said ahead of the report.

“Demand for hybrid cars — Toyota’s strength — remains strong as electric cars are still in a transition period,” he said.

But the Japan-U.S. trade talks “remain a potential threat to Japanese carmakers,” he warned, adding that “protectionism appears to likely remain unchanged in the U.S. even if the Democrats win the presidency.”

U.S. President Donald Trump’s administration has threatened to impose tariffs on Japanese cars imported to the American market.

The business environment for firms like Toyota has also been clouded by continued uncertainty from Brexit. Toyota executives have previously said there will be no way to avoid problems in the event Britain leaves the European Union without a deal.

Its assembly plant in Burnaston, England, which turns out 600 vehicles per day, runs under its famous “just-in-time” system, limiting stock held on site and relying on flexible imports of millions of parts from the EU.

GET THE BEST OF THE JAPAN TIMES
IN FIVE EASY PIECES WITH TAKE 5