Toyota increased its annual profit forecasts as it said net profit in its first quarter jumped 93% from last year. The world’s biggest carmaker now expects to make a net profit of 1.48tn yen (£9.8bn) for the current financial year, up from the 1.37tn yen (£9.1bn) predicted earlier in 2013.
Toyota said the weak yen, which has lost almost a quarter of its value against the US dollar since November, and a recovery in sales in the US, are to thank for the company’s profit surge.
Japanese companies as a whole (carmakers included) have benefitted from the weaker yen, which not only makes Japanese goods cheaper to foreign buyers but also helps boost the profits of exporters. Nissan and Panasonic, two large Japanese exporters, have recently seen some of the greatest benefits from the depreciating yen.
Last week, Nissan, Japan’s second-largest carmaker, projected that a weaker yen will add 225 billion yen (£1.5bn) to its operating income. Meanwhile South Korea’s Hyundai posted a drop in profit for a third straight quarter.
However, Toyota saw slower-than-expected growth in Southeast Asia, its third biggest market after North America and Japan.
Toyota sold about 539,000 vehicles in the region in the January-June period which was the same as last year, but 15% below the industry-wide growth.
As a result, Toyota is remaining cautious about its yearly outlook, despite its stellar results.
‘There are some uncertainties in emerging markets,’ Toyota Managing Officer Takuo Sasaki told a news conference.