Toyota Motor Corp may not be able to achieve a smooth earnings recovery into next year as it had hoped, due to the yen's sharp rise against the dollar and the fragile state of the US economy, a top executive said.
"The initial scenario was for this business year to be the bottom, as we wanted to avoid three straight years of losses," executive vice president Yukitoshi Funo told reporters today.
"But I don't think we can expect an improvement in a linear fashion into next year any more."
Toyota, the world's biggest automaker, had said it hoped to return to the black in the financial year starting in April after what would mark the second straight year of losses this year.
While production levels were recovering at a steady clip thanks to strong demand for hybrid and other fuel-efficient cars, partly due to Japanese government incentives, Mr Funo said the dollar's plunge would offset much of those positives.
"If it weren't for the forex impact, we may have been able to do better than we expected this year," he said, in response to a question about whether a return to profit might have been within reach in the year ending March 31st.
"But with currencies where they are, it's unclear," he said.
The dollar today was trading around 88.20 yen, after hitting a 14-year low of 84.82 yen last week.
Toyota last month posted a surprise profit in the July-September second quarter and more than halved its annual loss forecast to 350 billion yen (€2.6 billion) from 750 billion yen.
Reuters