TOKYO - A weak yen and pumped-up exports to North America and Europe brought record profits for Toyota Motor Corp. and Honda Motor Co. in the fiscal year ended March 31.
The strong showing came despite poor sales in Japan and the rest of Asia. Honda's total unit sales rose, but Toyota's fell.
Toyota's revenues also dropped, but Toyota attributed that to a change in the way the automaker books transfers of parts between itself and affiliates. Absent that change, revenues would have risen, Toyota said.
For the year, Toyota's revenues fell 4.6 percent and net income rose 17.7 percent.
Honda's revenues rose 13.3 percent while net income rose 17.8 percent. It was the second straight year for record net income and revenues at Honda.
Both companies' results were tallied on a consolidated basis, meaning that they include subsidiaries, such as overseas sales and production arms.
Daihatsu Motor Co., meanwhile, said its parent-only net profits edged up despite a drop in revenues.
STRONG IN AMERICA
Among Toyota's subsidiaries, Toyota Motor Manufacturing North America Inc. and Toyota Motor Sales U.S.A. Inc. were its most profitable, said Executive Vice President Iwao Okijima.
'All the rest are not as substantial as those two,' he said.
Toyota's United Kingdom operations, in fact, were in the red last year because of costs associated with the production launch of a new model there, Okijima said.
Honda's North American business was more profitable than Toyota's, however.
Honda's operating income in North America totaled $1.6 billion on revenues of $22.4 billion. Toyota's operating income in North America totaled $1.3 billion on revenues of $30.0 billion.
The weak yen played a key role in both carmakers' results. The currency rate averaged about 122 yen to the dollar over the entire year vs. about 112 in the previous year. A weaker yen means more yen revenues for every dollar in overseas sales for a Japanese company.
As a rule of thumb, a one-yen swing in the currency rate yields a $44 million shift for Honda and a $59 million swing for Toyota, according to Honda spokesman Takeshi Sumita.
For the current fiscal year, Toyota predicted its parent-only net income will fall 17.8 percent to $2.3 billion, as revenues slip 0.9 percent to $58.3 billion. The company did not offer a consolidated forecast.
Auto analyst Edward Brogan of Salomon Smith Barney Japan Ltd. said Toyota was being too pessimistic, though.
Toyota's forecast, he said, assumed that its exports will drop 5 percent while domestic sales rise 5 percent. 'Isn't it the opposite?' he asked rhetorically.
Honda forecast its group net will rise 3.6 percent to $2.0 billion, as revenues rise 3.3 percent to $46.9 billion.
Daihatsu's net income rose 7.5 percent to $52 million, in large part because of a sharp drop in its corporate tax payments.
Despite good exports to Europe, its reliance on the domestic market pulled total sales down 0.5 percent to $5.9 billion.