Toyota raises profit forecast

Toyota was racing towards another record year, as a weaker yen continued to fuel demand overseas, making up for slower domestic sales, the company said on Wednesday.

The world's biggest automaker said it has raised its operating profit forecast to 2.7 trillion yen (20 billion euros, $22.93 billion) for the year ending March 31. This is an 8-percent increase from the 2.5 trillion yen forecast in October.

The Corolla maker said its cost-cutting measures had also contributed to driving up its net profit estimate from 2 trillion yen to 2.13 trillion yen.

Slower sales, higher profits

"While we expect a reduction in vehicle sales, we are raising our operating income (estimate), factoring in the change in our foreign exchange rate assumption and the progress in our profit improvement activities, such as cost reduction efforts," Toyota's managing officer Takuo Sasaki said in a statement.

In the October-December quarter, Toyota booked a net profit of 600 billion yen, up 14.2 percent from the same period a year earlier, while operating profits shot up 27 percent to 762.9 yen. Quarter sales also rose 8.9 percent year-on-year to 7.17 trillion yen.

The yen's decline in past years has boosted sales abroad for the Japanese carmaker, which exports roughly half of the vehicles it produces at home, and helped Toyota outpace the competition. Strong demand in North America helped the company sell a record 10.23 million vehicles last year.

Cheap fuel prices in the US has whetted consumer's appetite for new cars, leading the company to upgrade its annual sales forecast for the region to 2.75 million vehicles, 100,ooo more than its previous estimate. Meanwhile, Toyota trimmed its projections for Japan, Asia and Europe.

pad/hg (AFP, dpa, Reuters)