Toyota posts record profitComment on this story
Tokyo - Toyota on Thursday posted a record annual net profit of $17.9 billion as the world's biggest automaker saw a recovery in major markets and got a boost from the weaker yen.
But the company, hit by a series of huge recalls and recent labour problems in India, warned that profit growth would slow this year.
Still, the buoyant results underscore a recovery not only for the Camry and Corolla maker but also for rival auto giants including Nissan and Honda.
Honda saw its net profit in the past fiscal year soar 56.4 percent, while Nissan reports its annual financial results next week.
On Thursday, Toyota said it had earned a net profit of 1.82 trillion yen ($17.9 billion) over the fiscal year to March, nearly doubling from a year earlier, as sales rose 16.4 percent to 25.69 trillion yen.
Toyota's operating income also jumped to 2.29 trillion yen, from 1.32 trillion yen, it said.
“Our consolidated operating income increased due to increased vehicle sales mainly in Japan and North America and to group-wide cost reduction activities,” company president Akio Toyoda said in a statement.
Japanese automakers have been big winners over the past year as a sharp drop in the yen inflated their repatriated profits, with results accelerating on the back of stronger demand in key markets including the US and China.
Sales in China fell off a cliff in late 2012 and into last year as a Tokyo-Beijing diplomatic row sparked a consumer boycott of Japanese brands in the world's biggest vehicle market.
Relations remain tense, but Japanese manufacturers have reported sales are returning to pre-spat levels.
Toyota has ramped up its drive to tap emerging markets, but analysts point to Japan's April sales tax hike and unrest in Thailand as possible headwinds.
About half of Toyota's latest net profit was due to the weak yen and “the road ahead is not so rosy”, cautioned Shigeru Matsumura, analyst with SMBC Friend Securities.
“The positive impact of the weak yen is fading, while the sales tax hike is likely to hurt sales in Japan,” he told AFP.
“Business in emerging economies is also getting tougher as customers demand better quality at low prices. There are some risks on the labour side too.”
For the current fiscal year to March 2015, Toyota said it was on track to earn a slightly weaker net profit of 1.78 trillion yen.
Toyota kept the title of world's biggest automaker with 2013
sales of 9.98 million vehicles, outpacing Germany's Volkswagen and General Motors, and said it expects this calendar year to become the first to break the 10 million vehicle sales barrier.
Toyota broke GM's decades-long reign as world's top automaker in 2008 but lost the crown three years later as Japan's quake-tsunami disaster hammered production and disrupted the supply chains of the nation's automakers.
Toyota also took a heavy blow from a series of mass recalls affecting millions of cars that damaged its once-stellar reputation for quality and safety.
Last month, Toyota recalled 6.39 million vehicles globally over a string of problems, while it also agreed to pay $1.2 billion to settle US criminal charges that it covered up a sticky pedal blamed for dozens of deaths.
Other Japanese automakers have suffered from damaging recalls while General Motors has said its bottom line has suffered owing to a $1.3 billion charge for the recall of seven million vehicles worldwide.
“Quality control is a really important issue,” said Matsumura at SMBC Friend Securities.
“Automakers are using a lot of common parts, which could trigger a huge recall once problems come up. It's going to be a crucial year for all automakers, including Toyota.”
Toyota is among a host of major Japanese firms to announce their first domestic wage hikes in years while the automaker has also announced plans to buy back about $3.5 billion of its shares as calls grow for the firm to unlock a huge cash war chest.
Toyota shares closed 0.30 percent higher at 5,528 yen in Tokyo. Its results were published after markets closed. - Sapa-AFP