NAGOYA, Japan/TOKYO — Toyota Motor expects a consolidated operating profit of 2.55 trillion yen ($23 billion) in fiscal 2019, up 3% on the year, the company announced on Wednesday.

But uncertainties in the U.S. and Chinese markets are likely to push sales down 1% over the period to 30 trillion yen. Toyota forecasts its net income in the fiscal year ending March 2020 will rise 19% to 2.25 trillion yen.

The Japanese automaker has yet to decide the annual dividend. It paid out 220 yen per share in fiscal 2018.

 

While the company predicts a higher operating profit this fiscal year, the number came in below the consensus market forecast for a 4% rise.

Toyota’s consolidated sales for fiscal 2018 rose 3% to 30.23 trillion yen, making it the first Japanese company to top the 30 trillion yen threshold.

“To sum it up, this has been a year where we pushed for a ‘full model change’ for the future of Toyota,” CEO Akio Toyoda told reporters in Tokyo the same day. “We were able to invest actively for the future, but we are still on the road to reforming our business culture,” Toyoda said.

The carmaker attributed the sales gain to cost-cutting and an aggressive sales drive over the past three years. Analysts will now turn their attention to whether the company can maintain solid sales in the U.S. and China in a weaker overall market.

While Toyota maintained solid earnings in fiscal 2018, a contraction in the auto market in the U.S. and China led to sharply lower profits among other big automakers, including Germany’s Daimler and Ford of the U.S.

Toyota’s performance was supported by new model rollouts and a tighter grip on dealer incentives. The Toyota group’s global unit sales which includes those of Daihatsu Motor, Hino Motors and others, set a record in fiscal 2018, reaching 10.6 million cars, up 2% from the previous year. It expects sales to rise slightly this year as well, reaching 10.74 million cars.

The company is now focusing its sales push on China, where it is trying to gain ground on its rivals. Toyota lowered the price of its luxury Lexus brand, which is exported from Japan, after the Chinese government slashed tariffs on imported cars last July. New models introduced in China include the Toyota C-HR crossover, and the Lexus LS and ES.

To boost brand awareness, Toyota has increased the number of motor shows it participates in by 10% a year since 2012. It now takes part in nearly 200 motor shows a year in China.

Although China’s auto market contracted for the first time in 28 years in 2018, Toyota’s sales jumped 14% to about 1.48 million cars, due to steady marketing efforts.

Toyota plans to release a new Corolla compact car this year and hopes to increase its total sales in China by 10% annually to around 1.6 million units in the 2019 calendar year and to around 1.76 million units by 2020.

The automaker also plans to build plants in Tianjin and Guangzhou to increase production capacity by about 35% versus current levels in 2021.

Although Toyota shares briefly jumped following the company’s announcement on Wednesday of a 300 billion yen stock buyback on May 15, they ended the day down 1%.

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