Toyota banking on weak yen, better U.S. sales for profit boost

Tue Feb 5, 2013 3:58am EST
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By Yoko Kubota

TOKYO (Reuters) - Toyota Motor Corp (7203.T: Quote) lifted its annual profit guidance, banking on stronger sales in its key U.S. market and a boost from a weaker yen, which put its Japanese manufacturing in the black for the first time in five years.

But the world's best-selling automaker, which shipped a record number of cars last year, said it would not build any new factories over the next three years despite the pickup in its fortunes, after it was burned in the financial crisis.

Toyota raised its net profit forecast for the year to March by more than 10 percent to 860 billion yen ($9.3 billion) on strong U.S. sales of the Camry sedan and other vehicles.

"If the current weak yen trend continues, the company's profit will likely sharply rise for the next fiscal year as well," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.

"If a recovery in the U.S. economy serves as a tailwind, its stock price has more upside."

The firm said it expected to ship 2.2 million vehicles in the U.S. this calendar year, up almost 6 percent from last year's figure.

Among Japan's big three automakers Toyota, Nissan Motor Co (7201.T: Quote) and Honda Motor Co (7267.T: Quote), analysts see top seller Toyota as the most likely to benefit from a weakening yen because it has the highest ratio of production in Japan, more than half of which it exports.

Japanese operations, including domestic manufacturing for export, used to generate about half of Toyota's profit, but they started losing money after the Lehman Brothers crisis of 2008, until the yen's recent weakening put them back into the black.   Continued...

Visitors look at Toyota Motor Corp's hybrid cars at the company's showroom in Tokyo February 5, 2013. REUTERS/Toru Hanai