Toyota Motor Corp flagged its smallest annual profit in four years for 2016/17 as the Japanese automaker braces for the impact from a strengthening yen amid slowing demand for some of its car models in the key North American market.
The world’s biggest automaker by market value cut its full-year operating profit forecast on Thursday to 1.6 trillion yen ($15.78 billion), expecting it to fall 44% from a year ago to its lowest since 2013.
Toyota trimmed its forecast from the 1.7 trillion yen given in May, as it revised its budgeted yen rate to 102 versus the U.S. dollar and 113 against the euro from previous forecasts of 105 yen and 120 yen, respectively. It promised steeper cuts to labor costs and tighter control over expenses to offset the worsening currency impact.
A strong yen hurts Toyota and its smaller domestic rivals including Nissan Motor Co and Honda Motor Co as cars exported from Japan become more expensive, while it also decreases the value of earnings made overseas. A weak yen in the prior three years had led to a period of record annual profits at Toyota. Read More