Toyota reports record profits but warns next year's will fall 35%

Japan's Toyota Motor made a record profit of 2.31trn yen ($21bn, £14.6bn), its third in a row, but warned profits would fall sharply next time.

Toyota is forecasting a 35% drop in net profit to $1.5tn yen.

Toyota, the world's biggest selling motor company, has done well out of a weak yen, which has made its goods cheaper in other countries.

Last year, one US dollar would buy 120 yen, but over next year is expected to buy just 105 yen.

Toyota is also expecting demand in key markets such as the US and China, to weaken this year.

The company's executive vice president Takahiko Ijichi said of this year's record results: "The positive factors such as cost reduction efforts and favourable foreign exchange rates more than offset the negative factors such as decreased vehicle sales and increased expenses, particularly labour costs and R&D expenses."

The company's forecast for the financial year from April to March 2017 does not factor in the effects of two powerful earthquakes in Kumamoto, south-west of Japan. Toyota halted its production line for one week last month, due to the earthquakes.

The Kumamoto region is a manufacturing hub for many big Japanese corporations. Honda and Sony also have plants there, and they too had to suspend their operations.

Also in the financial report, Toyota said its net revenue jumped 4.3% to 28tn yen. Vehicle sales rose in the North American market, offsetting declines elsewhere.

Sales had fallen across many markets, including Europe, Asia, Africa and at home in Japan.

Global leader

The company is best known for its Prius hybrid, Camry and Corolla sedan models and the Lexus luxury brand.

Industry data published in January showed Toyota has retained its crown as the world's top-selling carmaker for the fourth straight year.

The company sold 10.15 million cars overall in 2015.

In 2014, Toyota claimed the top spot with 10.23 million cars sold.