Toyota looks set to relinquish its status as the world’s largest car manufacturer to Volkswagen after the strength of the Yen put the squeeze on profits.
Revisions to the Japanese brand’s financial projections have seen anticipated net profit for the year to March 2017 fall from the ¥1.5tn projected in May to ¥1.45tn ($14.3bn).
The changed forecast comes after the Yen rose 9% against the US dollar in the first quarter, trading at an average ¥108 versus forecasts of ¥105, a trend which has continued post-Brexit.
Earlier this week, the dollar fell further to ¥100, the FT reported.
Cost-cutting measures are likely to follow as Toyota, which had already predicted falling profits as it stepped up investments in autonomous driving and artificial intelligence technology,looks to make savings.
Tetsuya Otake, Toyota’s managing officer, confirmed: “The yen appreciated dramatically in the wake of Britain’s vote to leave the EU (in June) so we launched an emergency programme to improve our profits.”
The FT reported that Toyota booked net profit of ¥552bn — down from ¥646bn a year earlier — for the three months to June.
Other Japanese carmakers have reported stronger-than-expected results, with Honda achieving 45% of its annual profit target in the fiscal first quarter, and Nissan delivering 26%.