Toyota profit outlook raised amid China hit

City A.M. Reporter
TOYOTA Motors nudged its full-year net profit forecast up to $9.7bn yesterday, even as it put the cost of recent anti-Japanese protests and a slowing economy in China at lost sales of 200,000 cars.

Sales at Toyota and its two Chinese joint ventures almost halved in September and October amid often violent protests in a dispute over ownership of islets in the East China Sea. Honda Motor’s China car sales more than halved last month, while Nissan Motor’s fell 41 per cent.

Toyota said the impact of the drop in sales would cost it ¥30bn off its full-year net profit. It sold around 900,000 vehicles in China last year.

While Honda last week cut its full-year net profit forecast by a fifth to take account of the China damage, and Nissan is expected to follow suit when it releases its July-September results today, Toyota has found room to revise its forecasts higher as it traditionally gives more conservative earnings guidance and relies less heavily on China sales.

Toyota increased its net profit forecast for the year to end-March to ¥780bn, up 2.6 per cent from its previous guidance. It said full-year operating profit would be ¥1.05 trillion, up a touch from its earlier forecast for ¥1 trillion. July-September net profit more than trebled to ¥257.9bn on solid sales in North America and Southeast Asia, beating an average estimate of ¥228.8bn. A year ago, Japanese manufacturers were still reeling from the March earthquake and tsunami.