(Reuters) – Japanese automobile companies could post record profits as they raise car prices and lower costs in an effort to reduce inflation. J.P. Morgan analyst said Tuesday.

JPM predicts price rises and reductions in certain production-related costs to offset 80% to 90% the rising cost of raw materials for Japanese original equipment manufacturers (OEMs). It expects these prices to rise on average by 95,000 yen ($742.88) per fiscal 2022.

“We think product price hikes are likely to go through in North America in particular, backed not only by solid demand but also the Japanese OEMs’ brand positions,” JPM analysts said.

Also, the brokerage upgraded Japanese automotive industry’s bellwether. Toyota Motor (NYSE.) Corp. to “overweight”, from “neutral”, citing production recovery, price positioning and other concerns about inflation.

Japan’s biggest automaker in terms of sales cut Friday its June global production plan. It also signaled that its full-year output estimate might be reduced, underscoring the difficulties caused by the China lockdown and supply chain crunch.

Global auto production is also suffering from high commodity prices and China’s COVID-19 locksdowns. As a result, car sales have been lower in China, Europe, and the United States than a year ago.

Forecasts for 2022 indicate a global automotive demand of 84.5 millions units. Japanese OEMs are expected to produce 24.3million.

($1 = 127.8800 yen)