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<\/a><\/p>\nToyota is predicting higher vehicle sales for the current fiscal year, with a target of 10.7 million units, compared with 9.5 million for the period that ended March. Net sales for the year are also predicted to climb about 5% to 33 trillion yen, Toyota said, also announcing plans to buy back as much as 200 billion yen of its own stock, or about 1% of total shares.<\/p>\n
At the same time, Toyota executives said the company is grappling with \u201cunprecedented\u201d increases in materials and logistics costs, speaking at a briefing Wednesday. Because Toyota is forecasting a 1.45 trillion yen hit from soaring material prices for the current year, chief financial officer Kenta Kon said the weakened yen won\u2019t deliver a \u201cmajor\u201d lift.<\/p>\n
Toyota is also assuming a exchange rate of 115 yen for each dollar, which implies a smaller boost compared with current levels near 130 yen, leading some to question Toyota\u2019s forecasts.<\/p>\n
\u201cGiven current Bank of Japan communications we are not convinced that the risk of yen appreciation is greater than that of further yen depreciation,\u201d Mio Kato, an analyst at LightStream Research, wrote in a note. Toyota\u2019s added burden of material costs \u201ccould be almost completely offset by a weaker yen,\u201d according to Kato.<\/p>\n
Though the yen\u2019s historic fall had somewhat bolstered optimism around Japanese automaker earnings, industry analysts have, at the same time, been warning of a growing number of risks related to both automotive supply and demand in the coming year.<\/p>\n
In March, IHS Markit downgraded its output forecast for the current calendar year in order to factor in the impact from Russia\u2019s invasion of Ukraine, then revised it down further last month in response to the fallout from Covid-related lockdowns in China, along with other mounting risks.<\/p>\n
Others are warning of potential shocks to demand. Jefferies Financial Group Inc. sees expectations for Toyota\u2019s earnings as being \u201ctoo bullish\u201d for the current fiscal year. The aggravation of cost inflation due to the Ukraine crisis and a potential slowdown in global economic growth will probably cause \u201cconsiderable damage\u201d to the auto sector overall, according to analyst Takaki Nakanishi.<\/p>\n
Fitch Ratings\u2019 Aoyama said that for Japanese automakers in general the yen depreciation has a positive impact accounting-wise for the medium-term. At the same time, \u201cthe yen depreciation, it\u2019s like window-dressing. It doesn\u2019t resolve the real, underlying issues,\u201d he said.<\/p>\n
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