Toyota 's reliance on the US market to drive record profits is deepening this year, its latest outlook showed, with strong sales of refurbished SUVs and Camry sedans expected to offset weakness in Thailand and other emerging markets. The world's best-selling automaker, which analysts say could be overtaken this year by German rival Volkswagen AG in global auto sales, also said it would stick to utilising existing plants to maximum capacity before investing in new factories.
Toyota on Tuesday posted 692.7 billion yen ($6.76 billion) in April-June operating profit, up 4.4 per cent year-on-year and its best quarter ever with solid US sales, cost cuts and a weaker yen bolstering profits. North American operating profit rose 45 per cent to 149.7 billion yen, surpassing Asia excluding Japan, which posted far more modest profit growth of 5.6 percent to 110.3 billion yen.
"Conditions in Thailand, India, Brazil and other emerging markets are weak," Managing officer Koki Konishi told an earnings briefing. "But we're trying our best to get an additional 50,000 vehicles out of Japan to offset some of that, and to reach around 2.3 million in the US," he said, referring to Toyota's 2014 calendar year sales targets. For 2014, the company trimmed its global group-wide sales forecast to 10.22 million vehicles, a reduction of 110,000 vehicles. The Toyota group includes Daihatsu Motor Co and Hino Motors.
Toyota raised its North American sales target for the financial year to next March while cutting its target for Asia excluding Japan and China, although its first-quarter profit margins in Asia rose slightly. “In Asia, where competition is intensifying, sales growth is struggling but there’s no drop in margins and it’s nothing to worry about,” said Kentaro Hayashi, an analyst at Tachibana Securities.
Reuters