Daihatsu Motor Co. said Monday it cut its full-year profit forecast because the global recession is dampening vehicle demand and the stronger yen is eroding the value of overseas sales.
Net income may total ¥21 billion in the year ending in March, compared with an earlier forecast of ¥32 billion, Japan's largest minicar maker said. Operating profit will probably be ¥40 billion, compared with an earlier estimate of ¥56 billion.
Daihatsu's overseas sales dropped for the first time in more than two years in November and domestic sales slipped for the first time in nine months in December as the economic slowdown and lower wages cut demand for its Move and Tanto minicars.
The yen's 23 percent rise against the dollar last year is also hurting profits earned abroad.
The stronger Japanese currency cut nine-month operating profit by ¥2.9 billion and will reduce full-year profit by ¥7 billion, Daihatsu said.
For the three months ended Dec. 31, net income plunged 85 percent to ¥1.2 billion and operating profit tanked 70 percent to ¥4.2 billion. The figures were derived from nine-month results announced by the company.
Separately, Daihatsu said it will halt production for nine days at two domestic factories in February and March. The company is reducing domestic output by 46,000 units this business year, compared with an earlier plan.
Minicars are powered by engines no larger than 0.66 liters.