Toyota sees first profit drop in five years on yen strength

TOKYO (May 11): Toyota Motor Corp said annual net income will probably decline for the first time in five years, as currency swings that had spurred record profits now pose stiff headwinds.

Net income may drop 35% to 1.5 trillion yen (US$18.9 billion) for the fiscal year ending in March, Japan’s largest company said in a statement Wednesday. The forecast trailed the 2.19 trillion yen average of 23 analysts’ estimates compiled by Bloomberg.

President Akio Toyoda has presided over three straight years of record annual profit, as a weakening yen boosted earnings from Japan-exported Corolla compacts and Lexus RX SUVs sold overseas. As the currency has strengthened more than 10% versus the dollar this year and US demand growth has stalled, the automaker is now racing to recover from production disruptions to keep ahead of Volkswagen AG by worldwide sales.

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