Tokyo: Toyota’s quarterly profit surged 70 per cent as a weaker Japanese yen and cost cuts helped offset a slight decline in vehicle sales.
Toyota Motor Corp. said on Wednesday its July-September net profit rose to 438.4 billion yen ($4.4 billion) from 257.9 billion yen a year earlier.
The Tokyo-based maker of the Prius and Camry raised its earnings forecast for the fiscal year ending March 2014 to 1.67 trillion yen ($16.9 billion). But it kept its sales forecast at 9.1 million vehicles, anticipating that higher than expected sales in Japan, North America and Europe will be countered by decrease in sales in Asia.
The company raised its capital spending plans by 20 billion yen ($203 million) to 940 billion yen ($9.5 billion).
Quarterly sales slipped to 2.24 million vehicles from 2.25 million vehicles a year earlier.
Toyota last month said its global sales for the first nine months of the year totalled 7.41 million vehicles, little changed from the previous year but outpacing General Motors to keep its lead as the world’s top-selling automaker.
GM lost the global sales throne to Toyota for the first time in 2008 but retook the crown in 2011, when Toyota’s plants were slowed by an earthquake and tsunami in northeastern Japan that damaged suppliers of parts. Toyota recovered the lead last year.
While rivals GM and Germany’s Volkswagen AG have been growing in China, Toyota’s sales have suffered from anti-Japanese sentiment that flared up last year over territorial disputes.
Toyota’s growth has come largely from the popularity of the Camry, Corolla and Tundra in the US. The company’s sales number includes heavy trucks made by Toyota’s group company Hino Motors, so the competition is hotter when such models, which GM lacks, are excluded from Toyota’s tally.
The revival of US automakers and strong line-ups from European and other Asian car makers present a challenge to Toyota, said Karl Brauer, senior analyst for Kelly Blue Book.
“This increased global competition means increased pressure on Toyota to introduce new and better products while controlling costs and maintaining profitability,” he said in a commentary.
Toyota’s president Akio Toyoda has stressed the company’s determination to avoid any quality lapses similar to those that led to a massive recall fiasco in the US that came on the heels of the financial crisis.
The weakening of the Japanese yen over the past year has played a huge role in the company’s improved profitability, while drawing complaints from its rivals. Toyota calculated its revenues and income using an exchange rate of 99 yen per US dollar in April-September of this year, compared with 79 yen per dollar last year.
It gained 280 billion yen ($2.8 billion) in net income from foreign exchange effects.
Toyota Executive Vice President Nobuyori Kodaira said the automaker will focus on improving its cost controls and profit per vehicle.
Profit rose 83 per cent in the first half of the fiscal year to 1 trillion yen ($10.1 billion).