By Yoko Kubota
TOKYO-- Toyota Motor Corp. solidified its status as one of the world's most profitable auto makers Wednesday, raising its full-year forecast to a record high thanks to a weaker yen and strong U.S. sales.
The world's best-selling auto maker said it now expects to post an operating profit of Yen2.7 trillion ($23.0 billion) in the fiscal year ending in March, up 17.8% from a year earlier. It was the second upward revision in two quarters--this one by 8%.
Toyota's full-year figure would rank it ahead of rivals Volkswagen AG, the world's second-best selling auto maker, and third-ranked General Motors Co., according to analysts' forecasts. GM was scheduled to report its fourth-quarter earnings later Wednesday.
"We don't care about rankings, about becoming No. 1 or No. 2," said Takuo Sasaki, a Toyota managing officer. "We've worked to improve our profitability and we've cut costs. We are seeing the fruits of these efforts."
To be sure, Toyota's profits don't rival those of Apple Inc., which last week reported the biggest quarterly profit by any company in history--one in the same neighborhood as Toyota's full-year number.
Still, it would represent a second consecutive record annual profit for Toyota, underscoring its solid growth after several years beset by recalls, natural disasters and worsening Japan-China ties.
Profits in the current year were driven by a decline in the value of the Japanese yen versus the U.S. dollar, which amplifies overseas profits when repatriated to Japan. Toyota ships more of its vehicles from Japan than fellow Japanese rivals Nissan Motor Co. and Honda Motor Co.
In the U.S., a sharp decline in fuel prices over the past six months has boosted demand for its sport-utility vehicles and pickup trucks.
In its financial third quarter, Toyota's operating profit rose 27% from a year earlier to Yen762.8 billion, beating analysts' estimates.
The Japanese auto maker didn't offer many hints about how it would use its profits. It started selling its fuel-cell car late last year and is preparing to roll out crash-prevention systems in a wide range of vehicles over the next two years. It said it raised its full-year research and development budget by 2% to Yen1 trillion.
It also increased its capital expenditure budget by 2% to Yen1.05 trillion.
Much of that money will be spent in Japan. Toyota plans to use 80% of the R&D budget and half of its capex budget at home, said Koki Konishi, a Toyota managing officer.
Executives remained mum about fresh investment plans, offering no information on whether the company might lift its three-year moratorium on building new plants, which runs through March 2016.
The auto maker trimmed its full-year consolidated global sales outlook by 0.5% to 9 million vehicles. The figure includes sales by group companies Daihatsu Motor Co. and Hino Motors Ltd., but excludes China and some other regions.
Toyota cited weak demand in Japan and Southeast Asia but said it continues to see strong sales in the U.S. It raised its sales outlook for North America for the year ending in March by 0.3% to 2.75 million vehicles.
January U.S. sales, including of Lexus vehicles, grew 15.6% year-over-year, with nearly half of those pickup trucks or SUVs, which tend to be more profitable than smaller cars. Pickups accounted for around 12% of Toyota's total sales volume in the U.S.--a ratio higher than its Japanese rivals, but lower than the Big Three in Detroit.
Globally, Toyota sees vehicle sales slowing in 2015, when analysts expect it to be outsold by Volkswagen. Toyota, along with Daihatsu and Hino, expects to sell 10.15 million vehicles this year, down 1% from 2014.
Earlier Wednesday, Fuji Heavy Industries Ltd., maker of Subaru vehicles, raised its full-year net profit forecast by 5% to record Yen253 billion, backed by a weaker yen. Its third-quarter net profit fell 5.4% from the same period a year earlier to Yen77.3 billion. Toyota holds a 16.48% stake in Fuji Heavy.
Write to Yoko Kubota at email@example.com