Daihatsu Motor Co. said Monday profit may fall 64 percent this business year as the global recession saps demand for its vehicles, including those it makes for parent Toyota Motor Corp.
Net income at Japan's largest minicar maker may drop to ¥8 billion in the year ending next March from ¥22.1 billion a year earlier, Daihatsu said in a statement. Sales may fall 14 percent to ¥1.4 trillion from ¥1.6 trillion.
The Osaka-based company has pared production of its cars and models it makes for Toyota, as a slowing economy and rising concerns push domestic auto sales to a 31-year low. President Teruyuki Minoura plans to cut capital expenses and fixed costs as a stronger yen is expected to reduce the value of its overseas sales, he told reporters in Tokyo.
The carmaker plans to reduce capital expenditures 28 percent to ¥550 billion this business year from ¥767 billion a year earlier. The company plans to shut one of two lines at its plant in Ikeda, Osaka Prefecture, and shift full-time workers at the factory to other plants, Minoura said.
"The plant has a high cost structure, and it's a part of our efforts to boost efficiency," he said.
Daihatsu will cut as many as 600 contract jobs in Japan in May to 1,400 positions, it said.
Operating profit may fall 56 percent to ¥17 billion, Daihatsu said. The company expects sales to Toyota and Fuji Heavy Industries Ltd. to fall 14 percent to ¥430 billion this business year from ¥498.6 billion a year earlier. Daihatsu makes about 30 percent of its sales to Toyota.