On Monday, Toyota Motor Corp raised its profit forecast for the full year by 9.6% as the No. 2 automaker in the world expects more help from the weakening yen while its efforts in cost cutting also will help.
Toyota has cut costs through sourcing more local car parts and through marketing cars that are locally produced more aggressively as a way to mitigate the impact of the strength of the yen as part of it emergency measures that it implemented in 2016.
The automaker in Japan expects its net profit through the end of March to be 1.7 trillion yen or $15.08 billion in comparison to its forecast previously of just over 1.55 trillion yen.
It expects its operating profit to be higher pushing its forecast up from 1.7 trillion yen to 1.85 trillion yen.
Analysts expect Toyota net profit to be 1.71 trillion yen through March and its operating profit to exceed 2.01 trillion yen.
Toyota expects its profit for the full year to drop from its record last year of 2.3 trillion yen. However, its outlook improved as it is anticipating its currency to average 107 yen to one U.S. dollar and 118 yen to one euro at the end of March. Those figures compare to its forecast previously of 103 yen to one U.S. dollar and 114 yen to one euro.
While currency volatility continues, Toyota has struggled to supply additional SUVs to the U.S., its largest market, where the demand by customers for the larger models as well as for trucks has soared of late due to the historically low prices of gasoline.
That forced the Japanese automaker as well as other domestic automakers in Japan, including its biggest rival Honda, to shift its production from sedans, which have been its staple across the region.
Toyota in 2016 increased its exports of the popular SUV RAV4 from Canada, and more Tacoma pickups were shipped from Mexico.
Auto exports bound for the U.S. from Mexico have upset U.S. President Trump who criticized the automaker along with its rivals for not making more of its autos in the U.S. that are eventually sold in the U.S.
Of the 2.45 million record vehicles sold by Toyota in the U.S. during 2016, close to half were imported said the automaker. The U.S. represents close to 25% of Toyota’s global sales.
Automotive exports from Japan are likely high on Prime Minister Shinzo Abe’s agenda when he meets later in the week with Trump in Washington.
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