Booming sales of fuel-efficient cars helped lift Toyota to its biggest quarterly profit and put the maker of the Prius hybrid on pace to beat General Motors Corp. as the world's No. 1 automaker this year.
Despite concerns in the industry about sluggish auto sales in the U.S. and Japan, Toyota Motor Corp. got help from a weak yen and cost cuts in its earnings announced yesterday for its first fiscal quarter.
Japan's biggest automaker posted a 32.3 per cent jump in profit to 491.54 billion yen, or about $4.3 billion (Canadian), for the April-June quarter.
Surging gas prices have proved a big plus for Toyota as drivers flock to its fuel-efficient models, including the Camry, the best-selling model in the U.S., and the Prius gas-electric hybrid.
Even in North America, a market that's proving tough recently, Toyota sold 762,000 vehicles in the April-June period, an increase of 15,000 vehicles from a year ago and helped by the introduction of the Tundra truck and Lexus LS.
"The results are fantastic," said Tsuyoshi Mochimaru, auto analyst with Lehman Brothers in Japan.
Quarterly sales rose 15.7 per cent to 6.523 trillion yen, or about $57.7 billion (Canadian). At current exchange rates, that's more than General Motors Corp.'s record quarterly sales of $57.5 billion set in the second quarter of 2006.
But Toyota kept what some analysts say is a conservative forecast for the full fiscal year through March 2008, projecting net profit to inch up just 0.4 per cent to 1.65 trillion yen, or $14.6 billion on sales of 25 trillion yen, or $221.4 billion.
It also kept its vehicle sales target for the full fiscal year the same at 8.89 million vehicles.
"We posted substantial increases in both revenue and profit, our highest ever quarterly results," said Toyota senior managing director Takeshi Suzuki.
Toyota surpassed GM in global vehicle sales for the first half of the calendar year, selling 4.72 million vehicles to GM's 4.67 million. Many analysts believe Toyota will likely beat GM for the full year in both sales and production.
The title of world's biggest automaker – which GM has held for 76 years – typically is determined by global vehicle production numbers. For the first six months of the year, Toyota and its group companies built 4.71 million vehicles worldwide, while GM estimates that it produced 4.75 million vehicles during the period.