Toyota posts record full-year net profit

Japanese car giant Toyota reported a record full-year net profit Wednesday thanks to a weaker yen and US tax cuts, but warned about the outlook for the next 12 months.

The country’s top carmaker said net profit jumped 36.2 per cent to 2.49 trillion yen ($23 billion) in April-March, but for the current year it expects that to fall 15 per cent to 2.12 trillion yen.

It said sales rose 6.5 per cent to a record 29.3 trillion yen despite a 0.1 per cent decline in vehicle sales by unit.

Operating profit surged 20.3 per cent, “mainly due to the effects of” a cheaper yen and “cost reduction efforts”, it said in a statement.

Toyota officials have said the profits were also the result of other factors, including US tax cuts.

“As for the future automotive market, developed countries are expected to remain steady while emerging countries are expected to expand gradually,” it said.

It said the auto industry was facing a moment of “profound transformation” because of “increasing serious environmental issues and other social challenges, (and) technological innovation such as automated driving”.

It expects a strong yen for the current fiscal year, with sales forecast to slip 1.3 percent to 29 trillion yen.

A higher yen makes Japanese carmakers less competitive in foreign markets and deflates profits when repatriated.

In the year to March, both sales and operating profit in Japan grew while operating profit in its main foreign market of North America declined despite a rise in sales.

The fall was the result of “increase in sales expenses, and decreases in both production volume and vehicle unit sales”, Toyota said.

Analysts say the Japanese auto industry benefited from US corporate tax cuts for the fiscal year.

“Toyota quickly recovered thanks to the US tax cuts and a weak yen for the last fiscal year,” Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm, told AFP ahead of the Wednesday earnings report.

But he added: “It is hard for the company to draw up a positive scenario for the current fiscal year as positive factors can’t be seen.”

Late last month, Toyota’s smaller Japanese rival Honda said annual net profit grew more than 70 percent thanks to strong growth in sales of its cars and motorcycles, as well as US tax cuts.