Japan’s Toyota Motor made a record profit of 2.31bn yen, its third in a row for the fiscal year ending in March 2016, but warned profits would fall sharply next time. Toyota is forecasting a 35% drop in net profit to $1.5tn yen. The automaker expects foreign exchange rate changes to reduce operating profit by about 935 billion yen in the year started April 1.
Toyota, the world’s biggest selling motor company, has done well out of a weak yen, which has made its goods cheaper in other countries. Last year, one US dollar would buy 120 yen, but over next year is expected to buy just 105 yen.
President Akio Toyoda has presided over three straight years of record annual profit, as a weakening yen boosted earnings from Japan-exported Corolla compacts and Lexus RX SUVs sold overseas. As the currency has strengthened more than 10 percent versus the dollar this year and U.S. demand growth has stalled, the automaker is now racing to recover from production disruptions to keep ahead of Volkswagen AG by worldwide sales.