Business Dec. 24, 2008 - 10:43AM JST ( 4 )

TOKYO —

Leading car parts maker Denso Corp said Wednesday its full-year net profit would be one 10th of an earlier forecast due to the poor performance of the auto industry and a strong yen.

Denso, a major supplier to Toyota Motor Corp, now estimates its group net profit at 10 billion yen for the year to March 2009, down from 101 billion yen it projected less than two months ago.

The financial crisis triggered in the United States had affected the whole world, noted Sadahiro Usui, managing officer of Denso.

“The business environment in the automotive industry is also drastically declining due to decreasing exports and the appreciated yen in Japan, in addition to slumping consumer spending worldwide,” he said in a statement.

Denso also downgraded its sales projection to 3.3 trillion yen from 3.65 trillion yen estimated on Oct 30. Its operating-profit forecast was lowered to 38 billion yen from 178 billion yen.

A strong yen makes Japanese exports less competitive and reduces earnings for exporters when their income is repatriated.

The Japanese currency has advanced sharply amid the financial crisis, trading at around 90 to the dollar recently compared with above 110 yen a year earlier.

Toyota on Monday forecast its first-ever operating loss for the full year to March as its president said the global slowdown had created “an unprecedented crisis” for the long profitable automaker.

Wire reports