August 3, 2018 – Toyota today said that its group net profit for the April-June period rose 7.2 percent from a year earlier to a record 657.31 billion yen ($5.9 billion) helped by brisk global sales, while a U.S. threat to impose higher tariffs on cars cast a shadow on its outlook.
Japan’s largest automaker by volume posted record-high sales of 7.36 trillion yen in the three months through June 30, up 4.5 percent, driven by robust demand in Europe and China, and an operating profit of 682.69 billion yen, up 18.9 percent.
But it maintained its full-year earnings forecast, citing expected costs in research and development. It foresees a net profit of 2.12 trillion yen, down 15 percent, and expects operating profit to decrease 4.2 percent to 2.3 trillion yen and sales to fall 1.3 percent to 29.00 trillion yen.
“When you look at the numbers for the reported quarter, we can say we are on pitch toward realizing our full-year targets but in terms of earnings power and cost-cutting, we are still half way,” said Senior Managing Officer Masayoshi Shirayanagi in a press briefing.
Toyota released its latest earnings as automakers around the globe brace for possible tariff hikes on autos and car parts by the administration of U.S. President Donald Trump in the name of protecting national security.
Toyota cut its FY2018 sales outlook for North America by 500,000 to 2.75 million units, as an “uncertain situation” has prompted it to take a cautious stance, according to Shirayanagi.
He added that if the United States goes ahead with the tariff hikes, it would have an “enormously big” impact on Toyota sales and earnings in the United States, its key market.
While other Japanese carmakers have indicated promoting production of autos locally in the United States as a response to possible tariff increases, Shirayanagi said Toyota will stick to keeping annual domestic production at 3 million units.
Overall, Toyota maintained its global group sales target of 10.5 million units, including vehicles produced by Daihatsu Motor Co. and Hino Motors Ltd.