Toyota Q1 profit hikes by 10%

Japanese carmaker Toyota has reported a 10% increase in profits for the first quarter of its fiscal year, helped by the weak yen and cost cuts.

For the period from April to June, the company said net income rose to 646.3bn yen (£3.34bn, $5,2bn) from 587.7bn yen a year earlier.

Toyota also raised its sales forecast slightly for the full fiscal year.

Last week it emerged that Toyota was overtaken by VW as the world’s largest carmaker in the first half od the year.

US recovery

In a statement, Toyota managing officer Tetsuya Otake said: “Favourable foreign exchange rates and cost reduction efforts were main positive factors, while decreasing vehicle sales and increased expenses to support initiatives for enhancing competitiveness were negative factors.”

Toyota’s sales in Japan were slightly lower, but sales in North America rose while Europe remained almost flat.

On the back of a weaker yen, Japanese car exports have benefitted from the US economy’s recovery in the past months.

In Europe, overall economic conditions also continued to recover though there still is concern over the impact of the Greek debt crisis.

‘Two-pronged approach’

Sales in Asia, South America Africa and the Middle East saw the biggest falls, with emerging markets affected by a slowdown in economic growth.

In China, the carmaker has seen increased competition from local car makers, Vivek Vaidya, an auto analyst with consultancy Frost & Sullivan, told the BBC.

“China is always the market where you will have significant competition from the lower end, from cheaper alternatives,” he said.

“So Toyota is using a two-pronged approach – their technology and their quality – to try and increase their market share in China in the future.”

In their outlook for the rest of the fiscal year, Toyota said it revised its vehicle sales forecast from 8.9 million to 8.95 million units.

Source: BBC