Toyota Motor Corp raised its annual forecast for a second time as Japan's subsidies to stimulate demand helped almost double quarterly earnings.
The carmaker had been rescued by Tokyo's generous incentives favouring the hybrid segment it dominates, but part of that stimulus ran out in September and this is set to hammer sales in Japan for the foreseeable future.
A stronger yen has compounded the problem, making exports from Japan less competitive and less profitable. Toyota ships out about half the vehicles it produces in Japan, compared with about 30 percent for Honda.
"I don't want to think about how we are going to protect production levels in Japan if the current forex levels continue," executive vice president Satoshi Ozawa told a news conference in Tokyo today after his company revised its average dollar/yen rate assumption to 85 yen from 90 yen.
Toyota president Akio Toyoda has vowed to focus more on improving Toyota's quality checks and customer satisfaction and less on sales volumes as he aims to steer the company founded by his grandfather back from a debilitating recall crisis.
For the year to end-March, Toyota now expects operating profit to rise to 380 billion yen (€3.3 billion), up from its previous forecast of 330 billion yen..
The maker of the Prius hybrid lifted its net profit forecast to 350 billion yen from 340 billion yen.
Toyota's sales fell in both China and the United States last month, bucking an expansion in the world's two biggest markets where rivals such as Hyundai Motor Co and Volkswagen AG are closing the gap.
Toyota was alone in reporting a drop in US sales for October.
For July-September, operating profit soared 92 per cent to 111.5 billion yen from a 58 billion yen a year ago.
Vehicle sales during the quarter jumped 9.6 per cent to 1.9 million units, with 54 per cent of the 166,187 gain coming from its home market. The company left its average euro/yen rate prediction unchanged at 112 yen.
For the business year Toyota nudged up its global sales forecast to 7.41 million units from 7.38 million, saying stronger demand in Asia will offset weaker sales in North America and Japan.
Reuters