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Weak Yen Helps Toyota make Record Profit

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Feb 12 , 20 15

After a fall in domestic sales offset by weak yen the biggest automaker in the world, Toyota is expecting a record high profit

Up from 2.5tn yen Toyota the biggest car manufacturer in the world is expecting record operating profit of 2.7tn yen for this fiscal year to March which is equal to $22.93bn or £15bn. The Japanese car market has slowed down, but the weakening of the yen acted as the life blood for the company and the value of Toyota’s overseas sales has been boosted.

Toyota was unfortunate for some time and had to recall almost 1.75 million cars alone in the month of October. This massive recall was triggered by various issues, but the major reasons were fuel component and faulty brakes.

Toyota earning Profits

Toyota earning Profits

Another interesting part is that Toyota recently has forecasted it vehicle sales will go up to 9 million units which have been cut from 9.05 million for this year.

In one of his statements, the managing officer Takuo Sasaki said that, even though the vehicle sales reduction is expected, Toyota is still raising its operating income forecast to 2.7tn yen from 2.5tn. The change in foreign exchange rate and our profit improvement activities are going to pay us back real good.

With a depreciation of nearly 15% in the value of yen against the US dollar last year, all the major Japanese exporters have made profits. However, the biggest chunk is for Toyota which happens to be the biggest exporter as it exports more than half the vehicles made in its Japanese plants. As compared to other regions of the world, Toyota has outperformed every other Japanese car manufacturer rival in the US market by having the biggest gains in the April to December period.

The sales in Japan have been affected after the introduction of sales tax increase since April last year.

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