Toyota hikes profit forecasts on strong demand

Japanese car giant Toyota on Thursday raised its full-year profit forecasts on the back of strong demand for hybrid vehicles and the weak yen, despite fierce competition from Chinese rivals.

For the current year to March 31, 2027, the firm said it expected net profit of 3.57 trillion yen ($22.6 billion), up from its previous projection in August of 3.25 trillion yen.

It predicted operating profit of 3.9 trillion yen, compared with its earlier forecast of 3.4 trillion yen. The world's largest automaker by sales said the decision came after it "mitigated the impact of rising materials prices and production disruptions caused by earthquakes and floods through recovery efforts at production sites and optimised global supply, thereby maintaining consolidated vehicle sales".

The yen has weakened because of the gap between Japanese and US interest rates, high oil prices and concerns that Prime Minister Sanae Takaichi's spending plans will further swell Japan's enormous debts. The weak currency has in recent months inflated resource-poor Japan's import costs, especially for oil as the Iran war strangles supplies from the Middle East.

While a weaker currency also boosts Japanese exporters' profitability, the country's automakers are being squeezed by US tariffs, the Middle East war and fierce competition from Chinese rivals.

Agence France-Presse