Japan’s largest automaker, Toyota Motor Corp., has forecast a 20 percent drop in profits due to the stronger yen and increased spending to bolster sluggish U.S. sales. The company expects to end the year with operating profits of 1.6 trillion yen, or $14.06 billion.
This is the second consecutive year of declining profits for Toyota. Last year’s profits were 30 percent lower than the preceding year’s. Experts say data suggests that U.S. consumer demand for new cars is weakening.
Toyota, the world’s second-largest automaker, counts on profits to fuel its large investments in new technologies, included automated driving and artificial intelligence. The company says that as revenue growth slows, it will need to prioritize its investments in order to remain profitable.
"In the sporting world, two years of falling profit would be considered a losing streak, and I hate losing," said Toyota president Akio Toyoda.
Toyoda said the company will continue to reduce costs according to a plan created last year. The automaker will also increase its focus on selling larger vehicles.
Despite the drop in profitability, Toyota’s unit sales are almost identical to last year’s. North America, Toyota’s largest market, accounts for about 28 percent of the company’s global vehicle says. Toyota says sales in North America dropped 0.6 percent this year, to 2.82 million vehicles.