Toyota Motor Corp. report ¥0.2 trillion increase in net profit for nine months through to December 2014.
The Japanese motor company also raised, for the second time, its net profit estimate to ¥2.13 trillion from an earlier ¥2.0 trillion forecast, with sales forecast at ¥27 trillion, up from an earlier estimate of ¥26.5 trillion for the current quarter.
Toyota's managing officer Takuo Sasaki said in a statement, “While we expect a reduction in vehicle sales, we are raising our operating income (estimate), factoring in the change in our foreign exchange rate assumption and the progress in our profit improvement activities, such as cost reduction efforts.”
Toyota revenue for the last nine month period rose 5.2% to ¥20.1 trillion, with record sales in 2014 of 10.23 million vehicles.
As the price of oil has fallen by over 50% in the last 6 months, consumer confidence, especially in the U.S., has led to strong demand for cars, with this market being the mainstay of Toyota’s income. Additionally for Toyota the depreciating yen has helped as it repatriates sales revenue from abroad.
However, Toyota may be too quick to raise its estimates on earnings and profit in the current quarter due to Tuesday’s U.S. vehicle sales data which recorded lower than expected Total Vehicle Sales at 16.66M versus forecast of 17.00M and a previous figure of 16.92M, detracting for the third month running.
Additionally the price of oil started to climb this week, trading at 51.20 on Wednesday, after reaching 54.20 Tuesday evening, and the USDJPY retracted from its upward curve with trading at 117.35 Wednesday morning GMT. Toyota’s answer to this dilemma is to plan a doubling of sales in China, a country that is slowing in economic growth but still achieving 7% overall.
In Europe car manufacturers are also experiencing a boost at present, due to factors such as low oil prices and benefits from foreign exchange rates with American company FIAT CHRYSLER AUTOMOBILES [FCA] selling 10.9% more cars (131,385 vehicles) in Italy for January from the same month a year ago.
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