TOKYO: Toyota booked a record $17.9bn annual net profit yesterday, driven by a recovery in major markets and the weaker yen, but the world’s biggest carmaker cautioned that earnings growth would stall this year.
Japanese car companies have been big winners over the past year as a sharp drop in the yen inflated their repatriated profits, while sales accelerated in key markets including the US and China. Toyota’s buoyant results underscore a recovery not only for the Camry and Corolla maker but also for rival auto giants including Nissan and Honda, which saw its net profit in the past fiscal year soar about 55 percent.
Nissan reports its annual financial results next week.
Toyota said it had earned a net profit of 1.82 trillion yen ($17.9bn) over the fiscal year to March, nearly doubling from a year earlier, as sales rose 16.4 percent to 25.69 trillion yen. Toyota’s operating profit jumped to 2.29 trillion yen, from 1.32 trillion yen, it said.
Company President Akio Toyoda credited cost cuts and stronger sales in Japan and North America for the results as Toyota looks to sell more than 10 million vehicles in 2014, an industry record. But he cautioned that this fiscal year’s net profit would come in lower at 1.78 trillion yen, as Toyota eyes “sustainable growth”.
“We’re determined not to target an unreasonable expansion that is beyond our capacity,” he told reporters in Tokyo. “Our goal is to achieve sustainable growth. The biggest risk is the kind of arrogance that big companies tend to have...Profit is not an objective, but rather a consequence.”
Toyota kept the title of world’s biggest automaker with 2013 sales of 9.98 million vehicles, outpacing Germany’s Volkswagen and General Motors, and said it expects this calendar year to become the first to break the 10 million vehicle sales barrier.
Toyota ended GM’s decades-long reign as the world’s top automaker in 2008 but lost the crown three years later as Japan’s quake-tsunami disaster hammered production and disrupted the supply chains.
Toyota has also been dealt a heavy blow from a series of mass recalls affecting millions of cars that damaged its once-stellar reputation for quality and safety.
Japanese automakers’ sales in China fell off a cliff in late 2012 and into last year as a Tokyo-Beijing diplomatic row sparked a consumer boycott of Japanese brands in the world’s biggest vehicle market. Relations remain tense, but Japanese manufacturers have reported sales are returning to pre-spat levels.
While Toyota has ramped up its drive to tap emerging markets, analysts pointed to Japan’s April sales tax hike — which could dent consumer spending — and unrest in Thailand as possible headwinds.
About half of Toyota’s latest net profit was due to the weak yen.
“The road ahead is not so rosy”, cautioned Shigeru Matsumura, analyst with SMBC Friend Securities. “The positive impact of the weak yen is fading, while the sales tax hike is likely to hurt sales in Japan,” he said.
“Business in emerging economies is also getting tougher as customers demand better quality at low prices. There are some risks on the labour side too.” AFP
