By Yoko Kubota
TOKYO-- Toyota Motor Corp. solidified its status as one of the
world's most profitable auto makers Wednesday, raising its
full-year forecast to a record high thanks to a weaker yen and
strong U.S. sales.
The world's best-selling auto maker said it now expects to post
an operating profit of Yen2.7 trillion ($23.0 billion) in the
fiscal year ending in March, up 17.8% from a year earlier. It was
the second upward revision in two quarters--this one by 8%.
Toyota's full-year figure would rank it ahead of rivals
Volkswagen AG, the world's second-best selling auto maker, and
third-ranked General Motors Co., according to analysts' forecasts.
GM was scheduled to report its fourth-quarter earnings later
Wednesday.
"We don't care about rankings, about becoming No. 1 or No. 2,"
said Takuo Sasaki, a Toyota managing officer. "We've worked to
improve our profitability and we've cut costs. We are seeing the
fruits of these efforts."
To be sure, Toyota's profits don't rival those of Apple Inc.,
which last week reported the biggest quarterly profit by any
company in history--one in the same neighborhood as Toyota's
full-year number.
Still, it would represent a second consecutive record annual
profit for Toyota, underscoring its solid growth after several
years beset by recalls, natural disasters and worsening Japan-China
ties.
Profits in the current year were driven by a decline in the
value of the Japanese yen versus the U.S. dollar, which amplifies
overseas profits when repatriated to Japan. Toyota ships more of
its vehicles from Japan than fellow Japanese rivals Nissan Motor
Co. and Honda Motor Co.
In the U.S., a sharp decline in fuel prices over the past six
months has boosted demand for its sport-utility vehicles and pickup
trucks.
In its financial third quarter, Toyota's operating profit rose
27% from a year earlier to Yen762.8 billion, beating analysts'
estimates.
The Japanese auto maker didn't offer many hints about how it
would use its profits. It started selling its fuel-cell car late
last year and is preparing to roll out crash-prevention systems in
a wide range of vehicles over the next two years. It said it raised
its full-year research and development budget by 2% to Yen1
trillion.
It also increased its capital expenditure budget by 2% to
Yen1.05 trillion.
Much of that money will be spent in Japan. Toyota plans to use
80% of the R&D budget and half of its capex budget at home,
said Koki Konishi, a Toyota managing officer.
Executives remained mum about fresh investment plans, offering
no information on whether the company might lift its three-year
moratorium on building new plants, which runs through March
2016.
The auto maker trimmed its full-year consolidated global sales
outlook by 0.5% to 9 million vehicles. The figure includes sales by
group companies Daihatsu Motor Co. and Hino Motors Ltd., but
excludes China and some other regions.
Toyota cited weak demand in Japan and Southeast Asia but said it
continues to see strong sales in the U.S. It raised its sales
outlook for North America for the year ending in March by 0.3% to
2.75 million vehicles.
January U.S. sales, including of Lexus vehicles, grew 15.6%
year-over-year, with nearly half of those pickup trucks or SUVs,
which tend to be more profitable than smaller cars. Pickups
accounted for around 12% of Toyota's total sales volume in the
U.S.--a ratio higher than its Japanese rivals, but lower than the
Big Three in Detroit.
Globally, Toyota sees vehicle sales slowing in 2015, when
analysts expect it to be outsold by Volkswagen. Toyota, along with
Daihatsu and Hino, expects to sell 10.15 million vehicles this
year, down 1% from 2014.
Earlier Wednesday, Fuji Heavy Industries Ltd., maker of Subaru
vehicles, raised its full-year net profit forecast by 5% to record
Yen253 billion, backed by a weaker yen. Its third-quarter net
profit fell 5.4% from the same period a year earlier to Yen77.3
billion. Toyota holds a 16.48% stake in Fuji Heavy.
Write to Yoko Kubota at yoko.kubota@wsj.com
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