Toyota reports first decline in annual net profit in Five years

Toyota reports first decline in annual net profit in Five years

Toyota Motor Corporation on Wednesday reported its first decline in annual net profit in the last five years, and warned investors that earnings could drop again due to costly U.S. customer incentives and a potential pick up in the yen.

The world's second largest automaker announced that its operating profit in the year to March slipped to 1.6 trillion yen (US$14.06bn), below analysts’ average estimate of 2.3 trillion yen. In the year just ended, the company generated 1.99 trillion yen in operating profit.

Company executive repeated concerns that it was becoming increasingly harder for the Japanese automaker to keep profits buoyant. The disheartening prediction underscores how the auto giant has relied heavily on a considerable slump in the yen over the recent years.

Executive VP Osamu Nagata told reporters, “Incentives are trending upward and competition is becoming extremely fierce. We don't want to get involved in excessive incentives.”

Toyota aims to sell 10.25 million vehicles worldwide in the year to March. The targeted figure is largely untouched from that of last year.

Sales in North America will likely ease 0.6 per cent to 2.82 million. In Asia, the company aims to sell 1.6 million vehicles, faintly higher than 1.59 million in the year that ended in March 2017.