* Net profit seen growing 7.4 pct in current fiscal year
* Year ended March 31 likely saw net profit double
* Fading forex boost a new challenge for President Toyoda
By Yoko Kubota
TOKYO, May 8 Toyota Motor Corp faces
stalling growth this fiscal year as the export-boosting tailwind
that it and other Japanese carmakers have received from the
yen's sharp depreciation over the past 18 months gradually blows
For President Akio Toyoda, the quieter year in prospect
offers a different challenge to the major events that have
marked his five years in charge, like the massive recalls of
2010, Japan's 2011 tsunami and the boycott of Japanese products
by Chinese consumers following a territorial dispute in late
Instead, when Toyoda briefs reporters on last year's
earnings and this year's prospects later on Thursday, he'll be
expected to explain how the world's best-selling car maker can
keep growing while coping with more routine matters - a
declining Japanese auto market, hit by a sales tax hike in
April, and a hiatus in vehicle launches.
Toyota's net profit is expected to grow just 7.4 percent to
2.03 trillion yen ($20 billion) in the financial year to March
2015, according to a mean estimate of 24 analysts surveyed by
Thomson Reuters I/B/E/S.
For Toyota, that would represent a swift deceleration from
the doubling of net profit that analysts estimate took place
last year. They expect Toyota to report a record net profit of
$18.6 billion for the year ended March 31, buoyed by exports.
The dollar has risen nearly 30 percent against the yen since
mid-November 2012, when it first became clear that Shinzo Abe,
who has been pledging to boost Japan's economy, would take power
as prime minister with measures that have weakened the domestic
Yet such a significant decline in the value of the yen
versus major currencies like the U.S. dollar and the euro is
unlikely to be repeated over the next year, meaning
profitability of Toyota's export sales to major markets like the
United States won't grow much.
Famously cautious in its financial forecasting, Toyota
itself could project no growth when it issues its forecast for
the financial year through March 2015 - or even predict a fall
in profit, one source close to Toyota and analysts said. That
would mark the first time in three years that the home of
household-name models like the Corolla sedan and the Prius
hybrid expects a profit decline.
"Toyota is temporarily entering a lull this year as it gets
ready for next year and beyond," said Koichi Sugimoto, a senior
analyst at Mitsubishi UFJ Morgan Stanley Securities. Sugimoto
said Toyota isn't expected to launch key new vehicles, including
the remodelled Prius hybrid, until the fiscal year beginning
A conservative forecast from Toyota would echo that of its
peers. Rival Honda Motor Co said late last month that
it sees net profit for this financial year growing just 3.6
percent, with weaker emerging markets' currencies biting into
Toyota subsidiary Daihatsu Motor Co said it expects
net profit to fall 2 percent this year, while five out of seven
auto parts makers in the Toyota group see profits down this
year, including Denso Corp and Aisin Seki Co.
Toyota has relentlessly cut around 300 billion yen in costs
each year. Unlike rival automakers Nissan Motor Co and
Honda that have been in expansion mode, Toyota has put a freeze
on building new plants for three years since around early 2013.
But for it to bolster growth, analysts say it must now
invest more, especially to increase production capacity and
"Toyota is reaching a turning point at which it will move
from its emphasis on defence to significantly more active
commitment to growth," Jefferies analyst Takaki Nakanishi said
in a report. Nakanishi said there's an expectation that Toyota
could soon show how it plans to expand capacity.
While Toyota expects its group-wide vehicle sales in Japan
to drop 5 percent to 2.18 million vehicles in calendar 2014, it
sees overseas sales growing 6 percent to 8.14 million vehicles.
Toyota's group sales figures include Daihatsu and Hino Motors
($1 = 101.5550 Japanese Yen)
(Reporting by Yoko Kubota; Editing by Kenneth Maxwell)