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Toyota profit rises 7.5%

Sales growth in China, South America and Africa offsets declines in North America.

February 06, 2008|From the Associated Press

TOKYO — Sales growth in China and other emerging markets offset a decline in the United States to help push Toyota Motor Corp.'s profit up 7.5% for its fiscal third quarter.

The maker of Prius gas-electric hybrids, Camry sedans, Corolla subcompacts and Lexus luxury cars has been flourishing as soaring gas prices boost the appeal of the Prius and other smaller models reputed for fuel efficiency.

Toyota, which narrowly trailed U.S. automaker General Motors Corp. for the top spot in 2007 global vehicle sales, said Tuesday that it sold 2.28 million vehicles in the October-December quarter, up 5.8% from a year earlier.

Its sales growth in emerging markets, including China, Africa and South America, as well as in Europe, more than made up for declines in North America, where sales fell 8,000 vehicles from a year earlier to 756,000 vehicles.

"We posted our highest-ever quarterly results for the third quarter in both revenues and profits, despite the severe business environment," Toyota Senior Managing Director Takeshi Suzuki said.

Toyota's group profit for the quarter ended Dec. 31 rose to 458.6 billion yen ($4.29 billion) from 426.7 billion yen in the same period the previous year. Quarterly sales rose 9.2% to 6.7 trillion yen.

Robust sales also made up for the 20 billion yen the carmaker lost from the effects of an unfavorable exchange rate. Toyota said the dollar cost about 113 yen during the fiscal third quarter, down from 118 yen in the same period a year earlier.

A weak dollar erodes the value of overseas earnings for Japanese companies such as Toyota, and the dollar's further decline in recent months possibly puts more pressure on Toyota in the year ahead.

But the company reaffirmed its sales forecast for the year ending March 31 unchanged at 8.93 million vehicles, up 4.8% from the previous year.

Toyota also kept its profit projection of 1.7 trillion yen for the fiscal year on 25.5 trillion yen in sales.

Worries are growing about U.S. sales amid a credit crunch, volatile stock markets and drooping consumer spending. Like other Japanese automakers, Toyota appears to be making up with robust growth in new markets, including China, Africa and Asia outside Japan.

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