TOKYO • Toyota Motor Corp predicted a record profit this fiscal year, helped in part by US President Donald Trump’s tax cuts and surging sales of the updated Camry sedan and RAV4 sport-utility vehicle (SUV) in the US.
A reduction in expenses through cost cuts and a favourable foreignexchange environment is also helping the carmaker lift its annual net income forecast to a record 2.4 trillion yen (RM86.02 billion), beating analyst estimates. Asia’s biggest automaker also boosted its projection for vehicle sales.
Trump’s tax cuts have helped a record number of companies raise their profit guidance, according to strategists at JPMorgan Chase & Co. Toyota, which is setting up a new plant in the US, said it would gain about 292 billion yen from the tax reforms. Toyota’s Japanese rival Honda Motor Co Ltd also last week raised its profit forecast for the year because of the reduction in tax rates.
Toyota said last year it’s saving costs through measures including the continued roll out of a new ma nufacturing process. The money spared will help bolster spending on research and development to a record 1.06 trillion yen this year as president Akio Toyoda pushes the company deeper into new electrified powertrains and artificial intelligence, areas he said the automaker needs to lead.
America’s love for SUVs also reverberated through Toyota’s earnings. While boosting sales of the RAV4 SUV, Toyota also retained its status as the maker of America’s bestselling car last year with the redesigned Camry. The Japanese carmaker captured 14.5% of the US market in January, second only to General Motors Co’s (GM) 17.2%, according to researcher Autodata Corp.
Toyota raised its forecast for North American sales this fiscal year to 2.81 million vehicles from 2.79 million. That made up for slight downward revisions for sales in Japan and Europe.
In December, the carmaker announced plans to have at least 10 battery-electric vehicles in its lineup by early 2020s, from zero now.
Like its rivals in the US, Toyota’s incentive spending is rising amid increasingly fierce competition. However, its average outlay per vehicle of US$2,585 (RM10,107) in January was less than half the US$5,193 that GM spent and far below Ford Motor Co’s US$4,182, according to research firm Autodata Corp.
To post those January sales numbers, Toyota relied more on deliveries to rental-car companies, according to Cox Automotive Inc. Fleet sales, which tend to be discounted, surged 69% from a year earlier, the researcher said. Rental cars tend to end up in the used-vehicle market, which then compete against new model sales. — Bloomberg