Currency Prospects Cast Shadow Over Prospects Though
Toyota of Japan is emerging from a dark tunnel into the sunlight and expects to more than double net profit in the current financial year.
Toyota was hit by high profile safety recalls of some of its vehicles and that was compounded by the earthquake/tsunami natural disasters at home. Over the next year, Toyota will be boosted by sales of a new Prius plug-in hybrid, new Corolla and Lexus ES 350, and it hopes to avoid suffering from currency problems.
Toyota said it is hopeful the yen won’t appreciate against the dollar this year. The company is more exposed to currency fluctuations than its compatriot car manufactures with 41 per cent of its global volume sourced in Japan, compared with 28 per cent for Honda and 25 per cent for Nissan.
Toyota said net income will more than double to 760 billion yen ($9.5 billion) in the year ending March 2013, compared with 286.6 billion yen the previous year.
Toyota expects an 18 per cent increase in sales, led by the U.S. and Asia excluding Japan. That is just as well, given that in Western Europe, its sales are down 8.4 per cent in the first quarter.
According to the Financial Times’ Lex column, Toyota’s net income was almost halved in the past year by the appreciation of the yen, and it clearly thinks Toyota is taking a gamble banking on that changing this year.
“Toyota does not think the yen will strengthen, even though that has been a vain hope over the past three years. (Company President Akio) Mr Toyoda may be on open roads, but he has navigated enough problems to know that most drives rarely go according to plan”, Lex said.
Neil Winton – May 15, 2012