Toyota halves profit expectation

TOKYO (Reuters) – Toyota, set to lose its crown as the world’s top-selling automaker this year, more than halved its annual profit forecast to $2.6 billion, reeling from a strong yen and Thai floods that severed its supply lines.

Toyota Motor Corp’s (7203.T) inability to make enough cars – production was also ruptured by the earthquake and tsunami in Japan in March – is expected to see it overtaken in sales this year by General Motors Co (NYSE:GM) and probably Volkswagen AG (VOWG_p.DE).

While Toyota is poised for record production next year as it rebuilds depleted inventories, the yen’s persistent strength against virtually every major currency means profit recovery will continue to be slow given its huge exposure to exports.

“Toyota is hitting a trough,” said Cho Soo-Hong, auto analyst at Woori Investment & Securities in Seoul.