TOYOTA: bullish Yen likely to plunge auto-industry’s profit by 35%

TOYOTA: bullish Yen likely to plunge auto-industry’s profit by 35%


Exclusive reports from Tokyo have brought in Toyota’s concerns over vulnerability upon its profit scale due to boosting strength of Yen.

The auto-manufacturer posed itself on third straight annual scale for the year — ended in March 2016 – being impacted by bearish Yen and stronger demands from the *U.S. (holder of its larger market position).

(*sales in April grew by 3.8% from March, which was nearly in line with industrywide growth of 3.6%)

WEDNESDAY: In its annual net profit, the industry reported a profit hike by 6.4% to $21.3 billion (i.e. to ¥2.31 trillion from ¥2.17 trillion, a year prior).

However, the profit scale might be at droop so far; in accord with its current financial report, the auto-manufacturer looks onto receive a net profit drop by 35.1% to 1.5 trillion – keeping in view Japanese currency’s boosting futures. Likewise, the impact would make exports less profitable.

“Until now, we benefited from currencies and our profits expanded beyond our actual capabilities. But since the beginning of this year, the tide has greatly shifted.” – President Akio Toyoda

INSIGHT: During this financial year, Toyota forecast an average Yen exchange rate of 105 to the U.S. dollar.

Exclusive data obtained from Market Watchers cites (for readers’ concern):

| During auto-industry’s fiscal 4Q, its net profit plunged by 4.4% from a year earlier to ¥426.6 billion – i.e. bearish to forecast laid by analysts worth ¥466.5 billion | the quarterly revenue dropped to ¥6.97 trillion |

Most of the Japanese auto manufacturers along with Toyota faced soaring profit due to weakening performance of Yen in late 2012. However, the currency has been rebounding since the beginning of this year – marking another bull track trend.

UPDATE: The yen is now TRADING at ¥109 against the Dollar – compared with around ¥120 in early January.