Since North America is Toyota’s largest market, an increase in tariffs, especially in its best selling pick-up truck models is likely to boost the cost of its vehicles by at least $3,000.
On Friday, Japanese automaker Toyota Motor Corp posted a 19% jump in its first quarter profits beating analysts’ estimates in what is its best performance in 2.5 years, on the back of cost cutting in Asia and higher sales.
The carmaker posted an operating profit of $6 billion (683 billion yen) for the first quarter against an average analysts’ estimate compiled by Thomson Reuters I/B/E/S of 639 billion yen.
It also reported a rise of 1% in its global retail vehicle sales to 2.6 million units, which saw a rise of 8.5% in Asia.
In the first 6 months of this year, the demand for its remodeled Camry in China jumped by 5.4% while in Thailand it rose by 26%.
In combination, sales in China and in Thailand rose by 40.2% contributing to its first-quarter profits in Asia. In North America, its biggest regional market, sales rose by a more modest 3.2% due to a rise in the demand for pick-up trucks, including the Tundra and Tacoma. Despite the rise, its profit fell by 29% on account of continued high sales incentives.
In Japan, although sales fell by 6.3%, profitability rose by 24% due to cost reductions as well as an increase in vehicles made in Japan that were exported overseas.
Toyota has maintained its full-year profit forecast at 2.3 trillion yen factoring in its currency fluctuations against the dollar at 1:106 from an earlier forecast of 1:105. The carmaker still anticipates that a stronger yen will offset the benefits of cost cutting.