TOKYO, (Xinhua) -- Toyota Motor Corp. on Wednesday raised its full-year operating profit and net profit forecasts by record highs of 9.1 percent and 9.7 percent and posted all time high group operating and net profits for the first fiscal half ended September.
The world's biggest automaker currently forecasts an operating profit of 2.5 trillion yen (21.87 billion U.S.) for the business year ending March 31 next year, up from a previous projection of 2. 3 trillion yen, having posted a group operating profit of 1.35 trillion yen in the six months ended on Sept. 30, up 7.7 percent from a year earlier and a group net profit gain of 12.6 percent to 1.13 trillion yen.
Toyota said that favorable exchange rates had been of benefit to the automaker, who derives the majority of its sales in markets outside Japan. Exporters like Toyota cheer a weaker yen versus its major counterparts, as it increases their competitiveness in overseas markets and ensures profits made overseas are inflated when repatriated.
"Of course exchange rates helped, but we also made efforts to offset negatives such as a rise in fixed costs, with cost-cutting and sales efforts," Nobuyori Kodaira, Executive Vice President, told a news conference Wednesday.
The Aichi Prefecture-based automaker said that its cost cutting initiatives, gains from the yen's decline and robust sales in its North American market, compensated for slumping local demand during the April-September period, when the nation was economically hamstrung by the government's consumption tax hike from 5 to 8 percent, which zapped consumer demand and sentiment, saw corporate investment drop and negatively impacted both industrial production and exports.
But solid sales in the first half saw Toyota Motor post a 3.3 percent rise in sales to 12.95 trillion yen in the first half and thereafter lift its sales forecast to 26.5 trillion yen, from 25.7 trillion yen.
Pioneer of the Camry, Alphard and ubiquitous Prius hybrid, Toyota also posted an 11.3 percent rise in second-quarter operating profit at 659.22 billion yen, beating median analysts' estimates for an operating profit just topping 650 billion yen.
The auto giant also posted a net profit increase in the period to 539.06 billion yen, a rise of 23 percent.
Toyota cited brisk sales in its North American market, as the world's largest economy continues to show signs of improving and drivers can find reasonable credit solutions for purchasing new cars and enjoy relatively low prices for gasoline.
Toyota, whose popular U.S. models include the RAV4 compact SUV - - sales of which surged 42.7 percent in September to 22,724 units - - raised its sales forecast in its biggest market to 2.74 million vehicles from 2.71 million, but said it plans to inject more activity in its Asian markets which have been weighing on the automaker.
Aside from sluggish sales in Japan, which in part have led to Toyota cutting its global sales plan for the current fiscal year by 0.5 percent to 9.05 million vehicles, the carmaker said it wants to increase sales in China by at least 20 percent to 1.1 million units this year, with the automaker, unlike its Japanese counterparts, enjoying alliances with Chinese partners such as China FAW Group Corp. and Guangzhou Automobile Group Co Ltd., which have both seen sales increase recently.