Toyota Affected by Stronger Yen Today; May Drop 35 Percent in Profit this Year

Toyota has admitted to a possible downfall in their profit in this coming year, given the stronger yen today and their emerging markets as well have slowed down. They are expecting to plunge their profit by approximately 35 percent.

According to the Toyota President, Akio Toyoda, the changing reality of the world currencies has affected their company's record having the highest profits for three consecutive years. Times are definitely changing and they have already started warning the people of their foreseen profit drop. Reportedly, Toyota is not the only one being affected by the Yen getting stronger. Over the last year, the Japanese yen has valued 6 percent more against the US dollar and it is expected to be continuously increasing until 2017.

The company announced last week that it had reached a record-breaking profit of 2.31 trillion yen but has warned that it may drop to just 1.5 trillion yen in profit, as reported. The company's revenue is also expected to take a downfall by 6.7 percent year on year. The company has reversed in profit due to the replacement of Takata-made airbags and disruptions to supply chains that were caused by the numerous earthquakes recorded in Southern Japan just last month. Toyoda has exclaimed how their earnings have been largely contributed by the foreign exchange rates; however the tides may have changed earlier this year.

Despite having depicted that a downfall later this year, Toyota still leads when it comes to supplier relations. The company still needs to establish the proper trust and communication with its auto suppliers to work on a better product. However, the rise and fall of the foreign exchange rates has been falling back that is not in favour of the Japanese automakers. The Japanese exports are not the ones that will profit from the currency shifts, which has disappointed many of the automakers from the country.

The Japanese businessmen in the world of automobiles are definitely affected and threatened by the foreign exchange rate today. They have to make their strongest efforts to keep up.