China’s demand for Lexus cars lifts Toyota’s third-quarter operating profit higher, but misses forecasts
- Japan’s largest carmaker posted an operating profit of Ұ676.1 billion, up 0.4 per cent from Ұ673.64 billion in the same period a year earlier
Toyota Motor’s quarterly operating profit edged up as continued increase in sales in Asia, including China, offset lower sales in North America, its biggest market.
Japan’s largest carmaker lowered its full-year net profit forecast to Ұ1.87 trillion (US$17 billion) from a previous view of Ұ2.3 trillion, citing unrealised losses on some of its equity investments, but reiterated its annual operating profit projection of Ұ2.4 trillion.
For the October-December quarter, Toyota posted an operating profit of Ұ676.1 billion, up 0.4 per cent from Ұ673.64 billion in the same period a year earlier. This missed an average estimate of Ұ680.84 billion from 10 analysts polled by Refinitiv.
Its global retail sales rose 2.8 per cent to 2.71 million units in the quarter from 2.63 million units a year earlier, driven by a climb in sales to 464,000 units in Asia including China, from 404,000 during the same period last year.
Sales in North America, which accounts for nearly 30 per cent of Toyota’s annual vehicle sales, came in at 680,000 during the quarter, from 735,000 a year before. Overall demand for cars in the region has stagnated over the past two years.
China, however, has been a bright spot for Toyota, partly because of strong demand for its Lexus luxury brand that has helped it buck a wider slowdown in the world’s biggest car market.
The Japanese carmaker sold 1.47 million vehicles in China in 2018, up 14 per cent on year. Toyota has said it aims to lift sales to 1.6 million in 2019 in the country, even as it and other carmakers brace for another tough year.
Car sales in China last year contracted for the first time since the 1990s, hurt by the phasing out of purchase tax cuts on smaller cars and the US-China trade war. The world’s second-largest economy grew at its slowest in almost three decades in 2018, and the pace is expected to weaken further this year.
For now, lower tariffs on cars made in Japan are helping buffet many of its carmakers from the slowdown in China, even as rivals such as Ford Motor continue to post losses there amid China’s blistering trade war with the US.
Warming political ties between Japan and China are also helping Japanese carmakers. Last year China and Japan pledged to forge closer ties as they look to deepen their relationship which in the past has hit rocky patches, prompting boycotts of Japanese products including cars.
Meanwhile, Waymo is in advanced talks to develop autonomous cars with Renault, Nissan Motor and Mitsubishi Motors, Bloomberg reported quoting sources, in a move that would join a leading self-driving force with the world’s largest car alliance.
A deal between the three carmakers and Alphabet’s self-driving unit could include making driverless taxis, said one of the people, who asked not to be named discussing private negotiations. An agreement could be reached as soon as spring, Nikkei reported earlier.
Waymo has previously announced deals with Fiat Chrysler Automobiles and Tata Motors’ Jaguar Land Rover. A tie-up with the French-Japanese alliance would be its biggest yet, adding partners who together churn out millions of cars a year – on par with the biggest individual carmakers, Volkswagen and Toyota Motor.
Alliance spokesman Nicholas Twork said the report was based on rumours and speculation. Waymo declined to comment.
For Renault and Nissan, collaborating with Waymo would bring leading-edge technology just as the race to develop autonomous vehicles heats up. It would also strike a positive note for the French and Japanese manufacturers, whose two-decade partnership has been beset by tension since the arrest in November of former leader Carlos Ghosn in Japan over alleged financial improprieties.
