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Toyota's net profit jumps to $16-billion

2016-02-05 09:20

LEADING THE WAY: Toyota said its nine-month net profit jumped nearly 10% to $16-billion, despite falling sales in most regions. Image: AP / Shizuo Kambayashi

Tokyo - Toyota on Friday said nine-month net profit jumped nearly 10% to 1.9-trillion yen ($16-billion), despite falling sales in most regions, with the world's top automaker focused on squeezing more productivity out of its plants.

The Corolla and Prius maker also slightly raised its fiscal year profit forecast to 2.27-trillion yen while it trimmed its annual sales forecast.

Unit sales were down in most regions, including Europe and Japan, the company said, but not in North America.

Sluggish sales at home

The region has out stood for Japanese automakers, with rival Honda last week saying it was a bright spot that helped offset sluggish sales at home.

Toyota and its domestic rivals have benefited from healthy growth in the US where low interest rates are proving a boon to consumers, although the Federal Reserve's possible plans for more rate hikes this year could dampen demand.

Weakening demand in emerging markets such as Thailand and Indonesia, as well as a planned consumption tax hike in Japan next year, could also eat into sales, analysts said.

New cars, said Shigeru Matsumura, analyst at SMBC Friend Research Center: "A further slowdown in emerging economies may affect (Toyota's) sales overseas, and an expected rate hike in the United States would dampen customers' appetite.

"These are potential risks."

Friday figures come after Toyota last month kept the title of world's top automaker for the fourth straight year after saying it sold 10.15-million vehicles globally in 2015, driving past Volkswagen and General Motors.

In the first half of 2015, the German giant, whose other brands include Porsche and Audi, was set to take the crown as it rode momentum in emerging economies.

But then it posted its first drop in annual sales for more than a decade after being hammered by a massive pollution cheating scandal.

VW scandal boosts Japanese automakers

Rakuten Securities analyst Yasuo Imanaka: "Volkswagen is in a severe situation.

"Japanese automakers can take advantage of the rival's slump by winning VW customers. The scandal could be a plus for Japanese firms."

On Wednesday, Toyota said that all its domestic parts plants would shut for a full day next week, expanding a production suspension that is set to be its longest since the March 2011 earthquake and tsunami disaster.

The move was due to a components shortage following an explosion at a supplier.

It did not say if the temporary production shutdown would affect results in the current quarter.

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