Toyota Motor Corp. said Friday that rising global sales helped push up its profit by 2.1% for its fiscal second quarter, putting the world's second-largest automaker on track for its fourth straight year of record earnings.
The gain comes as its American rivals General Motors Corp. and Ford Motor Co. are losing money and market share in the U.S. and are scrambling to cut production and employment.
Tokyo-based Toyota said its profit rose to 303.7 billion yen ($2.6 billion) for the quarter ended Sept. 30, up from 297.4 billion yen a year earlier. Revenue for the latest quarter rose 10% to 4.97 trillion yen ($42.4 billion).
Worldwide, the company sold 1.89 million vehicles in the quarter, a 6.2% increase, including a 9% jump in North America.
Toyota has deftly gambled on a strategy of balancing sales of large pickup trucks and sport utility vehicles with fuel-efficient, gasoline-electric hybrid models. In the U.S., hot Toyota products this year include the Prius hybrid -- dealers had only about a three-day supply of the car at the end of October -- the redesigned Avalon sedan, the tC coupe from its Scion brand and the Tundra full-size pickup.
Toyota's U.S. sales in dollar terms rose 9.9% through October this year, while GM sales fell 3.5% and Ford's were down 3.4%. Toyota's overall performance is heavily bolstered by its U.S. sales, which account for an estimated 60% of its operating profit, analysts say.
While GM and Ford are struggling to come to grips with mounting losses in the face of fierce competition from Asian import brands, Toyota keeps upping the ante. The automaker is spending $12 billion to boost production in Japan and add factories in Texas and Canada to help keep up with demand.
"Toyota is a huge financial juggernaut, with cash reserves that probably could allow it to buy some of the competition," said auto industry consultant George Peterson, president of AutoPacific Inc. in Tustin. "They can do things, with marketing and product development, the others cannot touch."
Rival automakers have complained that the fierce U.S. pricing wars have cut into profits, but Toyota, which spends far less on rebates and other incentives than most other automakers do, says damage to its U.S. profit has been minimal.
Indeed, Senior Managing Director Takeshi Suzuki said Friday in Tokyo that Toyota expected further improvement in its U.S. performance in coming months with the launches of new models of the Camry and Corolla.
"We expect our revenue and profits in North America to step up," he said.
Worldwide, Toyota expects to sell 8.03 million vehicles for the fiscal year that ends in March, a gain of 8.5%; that would bring it closer to surpassing GM as the No. 1 automaker near the end of the decade. Toyota overtook Ford as the world's second-largest manufacturer by sales in 2003. Toyota's $165 billion in market value is now more than five times GM's and Ford's combined.
On Friday, Toyota's U.S.-traded shares fell 89 cents to $92.25, but they have risen 13% this year. By comparison, GM's stock price is down 33% this year, while Ford's shares have declined 43%.
Times wire services were used in compiling this report.