Advertisement
Advertisement

Toyota expected to forecast higher profit, helped by solid demand, weak yen

By:
Reuters
Published: May 9, 2022, 07:52 UTC

By Satoshi Sugiyama TOKYO (Reuters) - Toyota Motor Corp is expected to forecast higher profit for the year ahead when it reports earnings this week, helped by solid demand and a weaker yen, even as commodities costs and supply chain woes put pressure on the global auto industry.

Employee stands among Toyota Motor Corp's cars at the company's showroom in Tokyo

By Satoshi Sugiyama

TOKYO (Reuters) – Toyota Motor Corp is expected to forecast higher profit for the year ahead when it reports earnings this week, helped by solid demand and a weaker yen, even as commodities costs and supply chain woes put pressure on the global auto industry.

The forecast, on top of an expected strong profit increase in the year just ended, would highlight the Japanese automaker’s ability to navigate a difficult environment, in part by charging customers more as the chip shortage tightens supplies.

The market will be watching closely to see how much of a negative impact higher commodities prices will have on Toyota and other Japanese automakers, as well as their expectations for the currency, said Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute.

Toyota is expected to forecast an 11% increase in operating profit to 3.36 trillion yen ($25.7 billion) for the year that started on April 1, according to a poll of 25 analysts by Refinitiv.

For the year just ended, analysts expect profit increased 37% to 3.02 trillion yen.

The company has said that both global production and sales saw a yearly increase for the first time in three years in the year just ended. Still, it was forced to announce cutbacks in production between April and June to ease the burden on its suppliers, which were frustrated by repeated production plan changes due to the shortage of parts.

In addition to rising commodities costs, supplies are also expected to be complicated by lockdowns that have followed COVID-19 outbreaks in China.

Rival Honda Motor Co is expected to forecast a 13% increase in profit to 925 billion yen, while Nissan Motor Co is expected to forecast a 50% jump to 318.5 billion yen, according to Refinitiv.

Toyota will report results on Wednesday, Nissan on Thursday and Honda on Friday.

($1 = 130.5500 yen)

(Reporting by Satoshi Sugiyama; editing by David Dolan, Kirsten Donovan)

About the Author

Reuterscontributor

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV. Learn more about Thomson Reuters products:

Did you find this article useful?

Advertisement