Toyota has said that its profits for the full year will be better than was anticipated due to growing sales and fluctuations in currency.
Toyota Says Full-Year Profits To Improve With a Weakening Yen
The Japanese carmaker, Toyota, has said that its annual profit for 2017 will improve and it is expected to garner 1.7 trillion yen ($15.1bn) in the year to March. This is a significant increase from the previous forecast of 1.55 trillion yen.
This announcement comes following news that Toyota was overtaken by Volkswagen as the top selling automaker in 2016.
For the past four years, Toyota has been the leading carmaker in terms of sales, selling 10.175 million cars globally in 2016. Meanwhile, Volkswagen reported last week that it had sold 10.31 million vehicles.
The Japanese company has announced that it had begun official talks with Suzuki to begin several projects such as technology to improve the safety of Suzuki cars.
According to analysts, the collaboration between these two companies, which may also involve a partnership on cars that are environmentally friendly, would enable Suzuki to access the advanced technology offered by Toyota. Meanwhile, Toyota will be able to leverage the robust market position Suzuki has in India.
Toyota’s 2016-17 forecast is significantly lower than the 2.1 trillion yen profit the company recorded in 2015.
However, the Japanese yen has continued to show a weakening trend against the dollar and the carmaker may benefit from a spike in overseas sales. The value of the sales is worth more when converted to the local currency.
Toyota has its eyes on the introduction of trade tariffs as proposed by the Trump administration. Currently, just half of the vehicles it sells in the US are assembled locally.
At the start of the year, US President Donald Trump attacked Toyota for manufacturing its cars in Mexico and selling them in the US.
Mr. Trump said the Japanese carmaker would be hit with a large boarder tax if it continued manufacturing its vehicles outside the US. The president has been very critical of both foreign and American car companies for ‘taking jobs away’ from the US.
Focus on America
However, Toyota president, Akio Toyoda, has said the carmaker does not plan to halt production in Mexico any time soon.
Speaking in Japan, he said, “We will consider our options based on what (Mr. Trump), the president adopts.
Toyota’s arm in the US said production and jobs in American would not be affected as a result of the company’s decision to open a new plant in Mexico.
The US is Toyota’s largest market where there is a large demand for the larger cars such as sport utility vehicles. Toyota is currently struggling to meet the growing demand that has been fuelled by lower petrol prices that have in turn reduced the cost of driving these vehicles.