Toyota quadruples April-December profit, ups forecast

Updated 06 February 2013
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Toyota quadruples April-December profit, ups forecast

TOKYO: Toyota said Tuesday net profit in the nine months to December quadrupled while it also lifted its full-year earnings outlook, reflecting the car giant’s recovery from Japan’s 2011 quake-tsunami.
The world’s number one automaker credited a sales boost in debt-struck Europe as well as the United States and Asia for the rise, and a weaker yen.
Toyota did not break out its latest figures for China, the world’s biggest vehicle market, where a diplomatic row between Tokyo and Beijing sparked a consumer boycott of Japanese goods.
But Senior Managing Officer Takahiko Ijichi said that September and October China sales tumbled by about half, although he added that: “By December, (sales) recovered to a 20 percent decline from a year earlier.”
Toyota previously said it expects to sell 200,000 fewer vehicles in China in the second half of its fiscal year to March and take a 30 billion yen ($325 million) hit to its bottom line. It sold 900,000 vehicles in China in 2011.
On Tuesday, Toyota said it earned 648.2 billion yen from April to December, up from 162.5 billion yen a year earlier, when automakers were pounded by the twin natural disasters, which devastated Japan’s northeast coast.
The automaker pointed to a weakening yen and cost-cutting for its improved results and upgraded forecast, with operating income soaring to 818.5 billion yen from 117.1 billion yen a year earlier.
The boost “reflects our increased vehicle sales and the progress we are making with our profit-improvement activities,” Ijichi said.
Sales in the period jumped 26 percent to 16.2 trillion yen, it said.
The firm also hiked its net profit forecast for the fiscal year through March to 860 billion yen from an earlier estimate of 780 billion yen, on projected revenue of 21.8 trillion yen.
Global vehicle sales in the year were on track to hit 8.85 million units, up from an earlier forecast of 8.75 million units, the automaker said, citing stronger demand in the North American market.
Toyota’s results for the three months to December saw net profit rise by nearly one-quarter although the figure fell short of some analysts’ expectations. Vehicle sales in Europe and Japan slipped in the quarter.
The results come after Japan’s three biggest automakers — Toyota, Nissan and Honda — last month posted record sales for 2012.
The figures confirmed Toyota had recaptured the title of the world’s biggest automaker from US giant General Motors which it lost in 2011.
Japanese firms struggled with a strong yen last year as it made their products less competitive overseas. The unit hit record highs around 75 to the dollar in late 2011, but it has been on a steep slide in recent months with the greenback buying 92.51 yen in Tokyo trade on Tuesday.
“On the back of the recent depreciation of the yen, Japanese automakers, including Toyota, will enjoy brisk results toward the end of the fiscal year and the early part of the next fiscal year,” said Shigeru Matsumura, auto analyst at SMBC Friend Securities.
But “the prospects for sales in China are still uncertain as they are linked to politics, rather than business.”
The long-standing row flared in September when Tokyo nationalized some of a tiny East China Sea archipelago that is also claimed by Beijing, setting off huge demonstrations across China and the consumer boycott.
Japanese factories and businesses across China temporarily closed or scaled back operations over fears of being targeted by angry mobs.
Last week, Honda said that its own nine-month net profit more than doubled although it trimmed its year to March forecast, citing the territorial spat.
Nissan — which has the most exposure to China among Japan’s top-three automakers — reports its results later this week.
Toyota shares slipped 1.19 percent to 4,540 yen in Tokyo. Its results were published after markets closed Tuesday.


Merkel seeks united front with China amid Trump trade fears

Updated 22 May 2018
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Merkel seeks united front with China amid Trump trade fears

  • Merkel seeks common ground to ward off trade war
  • Plans complicated by US policy moves

Chancellor Angela Merkel visits China on Thursday, seeking to close ranks with the world’s biggest exporting nation as US President Donald Trump shakes up explosive issues from trade to Iran’s nuclear deal.

Finding a common strategy to ward off a trade war and keep markets open will be Merkel’s priority when she meets with President Xi Jinping, as Washington brandishes the threat of imposing punitive tariffs on aluminum and steel imports.

“Both countries are in agreement that open markets and rules-based world trade are necessary. That’s the main focus of this trip,” Merkel’s spokeswoman Martina Fietz said in Berlin on Friday.

But closing ranks with Beijing against Washington risks being complicated by Saturday’s deal between China and the US to hold off tit-for-tat trade measures.

China’s economic health can only benefit Germany as the Asian giant is a big buyer of Made in Germany. But a deal between the US and China effectively leaves Berlin as the main target of Trump’s campaign against foreign imports that he claims harm US national security.

The US leader had already singled Germany out for criticism, saying it had “taken advantage” of the US by spending less than Washington on NATO.

Underlining what is at stake, French Economy Minister Bruno Le Maire warned the US-China deal may come “at the expense of Europe if Europe is not capable of showing a firm hand.”

Nevertheless, Merkel can look to her carefully nurtured relationship with China over her 12 years as chancellor.

No Western leader has visited Beijing as often as Merkel, who will be undertaking her eleventh trip to the country.

In China, she is viewed not only as the main point of contact for Europe, but, crucially, also as a reliable interlocutor — an antithesis of the mercurial Trump.

Devoting her weekly podcast to her visit, Merkel stressed that Beijing and Berlin “are both committed to the rules of the WTO” (World Trade Organization) and want to “strengthen multilateralism.”

But she also underlined that she will press home Germany’s longstanding quest for reciprocity in market access as well as the respect of intellectual property.

Ahead of her visit, Beijing fired off a rare salvo of criticism.

China’s envoy to Germany, Shi Mingde, pointed to a “protectionist trend in Germany,” as he complained about toughened rules protecting German companies from foreign takeovers.

Only 0.3 percent of foreign investors in Germany stem from China while German firms have put in €80 billion in the Asian giant over the last three decades, he told Stuttgarter Nachrichten.

“Economic exchange cannot work as a one-way street,” he warned.

Meanwhile, looming over the battle on the trade front is another equally thorny issue — the historic Iran nuclear deal, which risks falling apart after Trump pulled the US out.

Tehran has demanded that Europe keeps the deal going by continuing economic cooperation, but the US has warned European firms of sanctions if they fail to pull out of Iran.

Merkel “hopes that China can help save the atomic deal that the US has unilaterally ditched,” said Die Welt daily.

“Because only the giant emerging economy can buy enough raw materials from Iran to give the Mullah regime an incentive to at least officially continue to not build a nuclear weapon.”