TOKYO - Toyota's profit for the January-March quarter dropped 28 percent from the previous year as a strengthening yen and lagging North American sales chipped away at the Japanese automaker's earnings.
Toyota, the world's second largest automaker after General Motors Corp., said Thursday its net profit fell to 316.8 billion yen ($3.05 billion) for the fiscal fourth quarter, down from 440.1 billion yen in the same period the previous year.
Toyota Motor Corp. is forecasting even tougher times ahead amid growing worries about a U.S. slowdown, volatile currency fluctuations and soaring material and energy costs.
"We are facing a severe business environment," Toyota President Katsuaki Watanabe said. "Toyota considers this headwind as a valuable opportunity to turn it into a more flexible and stronger company."
The maker of the Prius gas-electric hybrid and Camry sedan is expecting to post a 27 percent plunge in profit for the fiscal year ending March 2009 at 1.250 trillion yen ($12 billion), it said.
For the fiscal year through March 2008, Toyota racked up record profit of 1.72 trillion yen ($16.54 billion) — an increase of 4.5 percent over the previous year — as strong earlier performance offset the downturn in the fourth quarter.
The pessimistic outlook for the current year underlines how even Toyota — with its small cars popular for their good gas mileage — hasn't emerged unscathed from the risks of a global slowdown and the U.S. credit crunch.
Like other major automakers, Toyota has been gradually switching its focus to China and other emerging markets. Toyota, however, still makes about a third of its sales in the key North American market.