Toyota Motor upgraded its full-year operating profit forecast by 8 percent on expectations of a weaker yen however flagged a unfavorable outlook for North America, its biggest market, where quarterly sales was up to the most affordable in almost 3 years.
Japan’s biggest automaker is having a hard time to sell more cars in North America, where automakers are battling for consumers with significant discount rates, particularly on sedans as motorist preferences shift to bigger SUVs and pick-up trucks. This has raised marketing expenses for Toyota and other automakers.
Profitable development in North America is important to Toyota to help it sustain big investments it is preparing to make in fast-growing new technologies such as automated driving functions and artificial intelligence.
Toyota stated on Tuesday it now anticipates full-year operating revenue to come in at 2.0 trillion yen ($17.54 billion), up from a previous forecast of 1.85 trillion yen, based on a modified presumption that the yen will trade around 111 yen JPY= to the United States dollar, from 110 yen.
The updated profit forecast number is basically similar to 2016’s operating profit of 1.99 trillion yen and in line with projections of a profit of 2.04 trillion from experts surveyed by Thomson Reuters I/B/E/ S.
Toyota Executive Vice President Osamu Nagata stated that the enhanced forecast was mainly due to a positive currency impact, adding that marketing activities, consisting of monetary incentives in the United States, would cut into total profitability this year.