Toyota Q2 profit jumps but cut annual sales forecast

Tuesday, 10 November 2015 00:03 - - {{hitsCtrl.values.hits}}

Toyota Motor Corp cut its full-year revenue forecast last week as the Japanese company expects weaker vehicle sales in emerging Asian countries, where demand for cars has been hit by slowing growth.

Slowing sales may knock Toyota from its perch as the world’s biggest selling automaker, a title it has held for the past few months after unseating Volkswagen AG in an ongoing, closely contested race.

Hit by a slump in sales in Indonesia and Thailand during the July-September quarter, Toyota lowered its revenue forecast by 1% to 27.5 trillion yen ($225.82 billion), citing an uncertain economic outlook in emerging Asian countries.

Like many Japanese automakers, Toyota has been enjoying solid growth in the United States, which is on track for a record year of annual sales due to an improving economy and lower gasoline prices.

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Visitors take pictures of Toyota Motor Corp’s Prius car displayed at the 44th Tokyo Motor Show in Tokyo, Japan, 5 November, 2015

The automaker said that while it expects to hit its annual China target of 1.1 million units, profitability in the world’s largest auto market is likely to worsen due a slowing economy.

“The auto market especially in developed economies will remain strong, but Asia may not recover as much as we are hoping to see, so we are more cautious on our emerging market forecast,” Managing Officer Tetsuya Otake told reporters.

Still, Toyota expects revenue including sales and other sources of income to be 1% higher than last year, and it kept its operating profit forecast unchanged at 2.8 trillion yen, as the effects of a weaker yen and cost reduction efforts would offset easing volumes and rising marketing-related expenses.

Toyota has topped the leader board for global auto sales in the past few months, selling 7.49 million cars worldwide in the year to September, more than No. 2 Volkswagen AG’s 7.43 million during the same period.

Operating profit rose 26% to 827.4 billion yen ($6.81 billion), just ahead of a consensus estimate, while net profit for the quarter rose 13.5% to 611.72 billion yen.

Toyota changes gear and makes late entry into self-driving car research

Reuters: Toyota Motor Corp said on Friday it will set up a research and development company with a focus on artificial intelligence in Silicon Valley, as competition to develop self-driving cars intensifies.

The world’s top-selling automaker plans to invest $1 billion in R&D over the next five years in a departure from its cautious stance on automated drive.

“I used to say, quite until recently, that we will go ahead with automated drive only if they beat humans in a 24-hour car race,” Toyota President Akio Toyoda told a news conference.

“But I changed my mind after I got involved with planning of the 2020 Olympic and Paralympic Games (in Tokyo),” he said, explaining it opened his eyes to the need for cars for the disabled and elderly.

Gill Pratt, a former MIT professor appointed CEO of Toyota Research Institute, said the race to build self-driving cars had only just begun, with many safety hurdles to clear.

“It is possible, at the beginning of a car race, that you may not be in the best position... But if the race is very long, who knows who will win?”

The new firm, which plans to hire about 200 staff, aims to accelerate research and development in artificial intelligence and big data, the carmaker said.

Pratt said Toyota vehicles around the world, all combined, travelled one trillion km every year.

“As these vehicles travel, they produce a tremendous amount of information. Information about the vehicle, information about the environment and the information about the driver,” he said. “We can use that information for tremendous social good. It is the key to accelerate the evolution of our future technology.”