Toyota in its third quarter will see a slump on Japan sales, viewpoint is being watched
Toyota Motor Corp is very likely to report a massive fall in its quarterly profits on Tuesday affected by tanking Japanese car sales and a strong yen, showing its damaging exposure to the loss-making export business.
Its rival in the domestic front, Nissan Motor Co is seen witnessing a drop in October-December profits and Honda Motor Co has already submitted weaker results for the period. But the fall Toyota is going to be the steepest given its heavier weighting in the shrinking Japanese market.
Toyota exported more than fifty percent of its Japan-made vehicles in the last year, incurring a loss on many of them with the dollar well below the minimum ninety yen as President Akio Toyoda has said at that time that it was necessary to keep Japan's manufacturing sector competitive.
According to analysts, Toyota's excessively big Japanese operations, having seventeen assembly plants across the group will be responsible for dragging down its relative earnings power.
Toyota, which remained in front of General Motors Co as the biggest automaker of the world by a thinner margin in the last year, built forty three percent of its vehicles in Japan last year, compared with twenty seven to twenty eight percent for Honda and Nissan.
Toyota has seen a recent rally in its shares due to a recovery in car demand in the United States which is Toyota's biggest market, but more analysts look at the stock as a hold or sell than a buy, making them more aggressive on Nissan and Honda.
According to some other analysts Toyota might suffer further from the lasting effects of last year's recall crisis, particularly as consumers have more car models to choose from with the expansion of Hyundai Motor Co and Volkswagen AG (VOWG_p. DE) in America.
United Kingdom News
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