06 Feb 2019
Toyota Motor Corp’s quarterly operating profit edged up as a result of its increasing sales in the Asian market, offsetting the 81% drop in net profit as a result of lower sales in North America, its largest market.
The Japanese automaker lowered their forecasted net profit for 2018 from 2.3 trillion yen to 1.87 trillion yen ($17 billion), alluding to unrealised losses on some of their equity investments, however, reiterated its annual operating profit projection of 2.4 trillion yen.
Operating profit for Toyota for their October to December quarter was recorded at 676.1 billion yen, which was up 0.4% from 673.64 billion yen in the same period last year.
Global retail sales for the company rose 2.8% to 2.71 million units, from 2.63 million units earlier on in 2019. The increase was driven by the sales rising to 464,000 units in Asia, including China, compared to 404,000 during the same period last year.
30% of the annual sales for Toyota come from North America. However, as the demand for cars in that region has stagnated over the past two years, a drop in units sold was seen, with them selling only 680,000 units during that quarter, compared to 735,000 the year before.
In North America, operating profit was recorded at 45% lower from the year earlier.
Despite the drastic fall in sales in the North American region, China was a bright spot for Toyota, offsetting the decline. Particularly through the strong demand for their luxury brand Lexus.
Lower tariffs on cars made in Japan have helped many Japanese carmakers from the slowdown in China, including Toyota. Whereas many of its competitors, such as Ford Motor, reported losses amid the China and United States trade war.
Warming political ties between Japan and China have also helped many Japanese automakers.