8 May 2008

Toyota says that it expects year-on-year reductions in both profits and sales as the high value of the yen and weak sales in North America take their toll. This would be the first falls in profits and sales for nine years.

 

The group says it expects a net profit of ¥1.25 trillion (€7.8 billion) for the year that started in April, a reduction of 27.2 per cent from the previous year. Sales are forecast to be down by 4.9 per cent to ¥25 trillion (€15.5 billion).

 

President Katsuaki Watanabe said the economic slowdown, especially in the US, rising raw material prices and the of the exchange rate were combining to put Toyota under pressure.

 

The group expects that increased costs of steel and other materials will push its profits down by at least ¥300 billion (€185 million).

 

Despite the forecast for lower sales revenues, Toyota plans to make more cars than ever before, Watanabe said. The group is going for consolidated sales worldwide of 9.06 million – the figures also include cars from Daihatsu and trucks from Hino. That would be a rise of 147,000 over the figure achieved in the 2007 fiscal year.

 

US gloom continues, however, with sales there forecast to fall by 188,000 to 2.77 million units.

 

• Honda last month also blamed the value of the yen for a forecast reduction in its profits for the year ending in March 2009. Honda reckons its net profits will drop by 18.3 per cent to ¥490 billion (€3 billion) but sales will grow by 1.1 per cent.