AFPTOKYO (AFP-Jiji) — Japanese car giant Toyota Tuesday reported a rise in first-half net profit and raised its forecast for the whole year, citing a cheaper yen and cost-cutting efforts.
Japan’s number-one carmaker said its net profit rose 13.2 percent to ¥1.07 trillion ($9.4 billion) for the six months to September on sales of ¥14.2 trillion, up 8.6 percent.
The Prius maker now expects to bank a net profit of ¥1.95 trillion for the fiscal year to March 2018, up from an earlier estimate of ¥1.75 trillion.
During the previous fiscal year, Toyota suffered its first drop in annual profit for five years, which it blamed on the cost of customer incentives in the key U.S. market.
Toyota said operating profit from its domestic and European markets showed moderate gains for the first half. But operating profit from North America more than halved due to a decline in sales and swelling incentives.
“Toyota has benefited from a weak yen, but growing incentives in North America have pressured its profit,” said Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm. “Foreign exchange will remain a decisive factor for the second half,” Takada told AFP before the announcement.
The level of Japan’s currency against the dollar and other units is a key factor in Toyota’s competitiveness abroad and in the value of profits it earns abroad.
The yen has moved sharply in recent years, surging after Britain’s shock vote to exit the European Union boosted demand for the safe-haven currency.
The trend briefly reversed course after Donald Trump’s November U.S. presidential election victory boosted the dollar against the yen and other currencies.