Toyota Motor Corp. became the first Japanese firm to top the 2 trillion yen line in profits, driven by brisk sales in North America and Europe and the weaker yen.
The Aichi Prefecture-based automaker’s operating profit for the 2006 business year, which ended in March, jumped 19.2 percent from the previous year to 2.24 trillion yen, a new record for the seventh straight year and making it the first Japanese firm to top the 2 trillion yen line in operating profits.
Toyota meanwhile gave a modest forecast for the current year through next March, anticipating only a slight increase in profits due to an expected slowdown in North American market growth.
Net profit surged 19.8 percent to 1.64 trillion yen, while sales rose 13.8 percent year-on-year to 23.9 trillion yen. Net profit has continued to increase for the fifth consecutive year and sales gained for the seventh straight year.
“Our continuous efforts for growth in the global market are paying off,” Toyota President Katsuaki Watanabe told a news conference in Tokyo.
The yen’s depreciation against other currencies, mainly the dollar and the euro, inflated Toyota’s operating profit by 290 billion yen, according to the automaker.
Cost-reduction efforts meanwhile pushed up the operating profit by 100 billion yen.
Rising sales coupled with these factors more than offset increases in R&D and labor costs, Toyota said.
In terms of volume, including sales at its subsidiaries Daihatsu Motor Co. and Hino Motor Ltd., Toyota sold 8.52 million vehicles worldwide in business 2006, up 7 percent from the previous year.
Although Toyota saw its car sales fall in Japan and other Asian markets, sales increased in North America and Europe mainly led by strong demand for new models.
In North America, Toyota sold 2.94 million cars, up 15.1 percent from the previous year, thanks to strong demand for the Camry sedan, the RAV4 sport utility vehicle and the Yaris compact.
Sales in Europe rose 19.8 percent year-on-year to 1.22 million units, mainly led by brisk sales of the RAV4 and the Yaris.
But in the domestic market, sales dropped 4 percent from the previous year to 2.27 million cars, although Toyota achieved a record 41.5 percent share of the Japanese vehicle market, including minivehicles.
In other parts of Asia, sales slumped more than 10 percent to 789,000 units due to falling sales in Indonesia and Taiwan.
For the current business year to March 2008, Toyota made a conservative forecast as it sees only slight profit increase given the expected slowdown in North America sales.
“I think the American market will remain flat this year, but we are taking a conservative approach,” Watanabe said.
For the current business year, Toyota expects to see a 0.4 percent increase in net profit to 1.65 trillion yen, a 0.5 percent rise in operating profit to 2.25 trillion yen and a 4.4 percent gain in sales to 25 trillion yen.
The automaker hopes to achieve these figures by selling 8.89 million cars globally.
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