TOKYO (AFP) – Toyota on Wednesday said it was on track for record $17.5 billion full-year net profit, as Japan’s major automakers wrapped up a bumper earnings season, but a slowdown in Asia, including China, could slam the brakes on growth.
The world’s biggest automaker revised up its fiscal year profit forecast by 12.4 per cent to 2.0 trillion yen, and said revenue would come in at 26.5 trillion yen, as it saw strong results in North America.
It also booked a 1.13 trillion yen net profit for the six months through September, from 1.00 trillion yen a year ago, while revenue rose 3.3 per cent to 12.94 trillion yen.
The results came a day after rival Nissan said its half-year net profit rose 25 per cent to 237 billion yen and Honda last week reported a nearly 19 per cent jump in its six-month net profit to 288.41 billion yen.
The Japanese auto industry has benefited from the big-spending policies of Prime Minister Shinzo Abe, with huge monetary easing measures from the premier’s hand-picked team at the Bank of Japan helping push down the yen since last year.
A weaker yen boosts the competitiveness of exporters and inflates their repatriated overseas profits, although analysts say the effect has been waning in recent months.
“The lower yen is undoubtedly a tailwind but factors other than that have not improved significantly from the first quarter,” said Credit Suisse analyst Masahiro Akita. “It is unclear how demand in China – a core market for Japanese automakers – will fare,” he added.
Nissan and Honda both warned over slowing sales in China.
Toyota reported a nearly 7.0 per cent increase in the huge market, but half-year results were down in some other key Asian markets including Indonesia and Thailand, which has been hammered by political unrest, with sales tumbling 26 per cent from a year earlier.