TM Toyota Motor Corporation

By Sean McLain 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 4, 2018).

TOKYO -- Toyota Motor Corp. delivered a record profit for the April-June quarter and said it saw limited impact from steel and aluminum tariffs on its bottom line.

However, Toyota said the proposed tariff of up to 25% on imported cars being considered by the Trump administration would add as much as $6,000 to the price of each vehicle. Toyota sent 700,000 vehicles from Japan to the U.S. last year.

For now, Japan's biggest auto maker maintained its forecasts for the current fiscal year, ending next March, after posting net profit of Yen657 billion ($5.89 billion) in the April-June quarter, a record for that period. Toyota's operating margin rose to 9.3%, which company executives said was largely because of cost cuts and an increase in vehicle exports from Japan.

Toyota said the impact of U.S. steel and aluminum tariffs would reduce operating profit by a little under $100 million in the year ending March, less than the impact Ford Motor Co. has cited. The tariffs have lifted the price of imported steel and aluminum in the U.S. and allowed domestic producers to raise prices.

The impact is smaller on Toyota in part because it exports many vehicles to the U.S. from Japan. U.S. sales of imported Toyotas rose during the quarter, helped by increased demand for Toyota's popular RAV4 sport-utility vehicle.

Finished vehicles, including the steel inside them, face a lower tariff when entering the U.S. than Japanese steel imported into the U.S. separately.

Toyota is upgrading its RAV4 factories in Canada, which will double production capacity to around 400,000 when the improvements are completed later this year.

The auto maker aims to limit exports from Japan after production is expanded, said Moritaka Yoshida, a Toyota executive vice president.

Write to Sean McLain at sean.mclain@wsj.com

(END) Dow Jones Newswires

August 04, 2018 02:47 ET (06:47 GMT)

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