THE BIRMINGHAM POST--Although Toyota lowered its sales volume forecast for the business year by 80,000 units to 7.95 million vehicles, predicting a shortfall mainly in Japan and Indonesia. Toyota has posted a 14 per cent rise in third quarter profits as overseas markets raced ahead and a weaker yen boosted the value of earnings.
Brisk demand for cars such as the Prius hybrid and cost-cutting efforts helped the company absorb extra spending on new and expanded manufacturing facilities around the world after three straight quarters of profit decline.
The investment has included a pounds 50 million spend to boost production at its Burnaston factory near Derby to 285,000 Avensis and Corolla vehicles per year. With key new models such as the Camry and Lexus LS saloons and the Tundra pickup truck to be rolled out in the lucrative US market soon, analysts expect further gains for Toyota as it closes the gap with General Motors, the world's top seller of cars.
Senior managing director Takeshi Suzuki said: "With these results, we managed to expand our profits through the first three quarters from the year-earlier period despite the big investment outlays to meet ballooning vehicle demand.
"The weaker yen helped, but all in all I think it was a commendable performance." Toyota, which the market values at pounds 106 billion - more than DaimlerChrysler, Honda, and Nissan Motor combined - had an operating profit of pounds 2.32 billion for October-December. Group revenues grew 15 per cent to pounds 25.9 billion as global sales volume rose 7.7 per cent to 1.98 million units.
Last year Toyota recorded its 14th consecutive year of growth in the UK with 138,536 cars and commercial vehicles sold here. Corolla (24,199), Verso (9,570) and Prius (3,749) all recorded their highest ever annual sales while Toyota's best selling model was the Yaris (33,981). Toyota's domestic rivals, Nissan and Honda, also reported better third-quarter earnings last week, helped by the yen's fall against the dollar, euro and other currencies.
Tough competition from Asian brands has sent core automotive operations of GM and Ford reeling under losses, forcing America's top two auto makers to call for massive job cuts and plant closures.
"The operating environment is good for Toyota right now," said Yoshihisa Okamo-to, a senior vice president at Fuji Investment Management, adding that the market focus would shift to the outlook for next business year.
"Toyota has been investing in production capacity and I think we can expect them to post solid growth. I think Toyota's stock will rise."
Toyota does not provide group-based profit forecasts but repeated its prediction that it would beat last year's record levels.
A consensus forecast of 22 brokerages puts Toyota's group operating profit at pounds 8.5 billion for the year ending in March, up 4.7 per cent from the last business year.
Heavy capital spending is expected to keep profit growth in check compared with revenue expansion.
Mr Suzuki was coy about spending plans for next year, saying that while it would not rise or fall significantly, high commodity prices meant investments could end up being more expensive.
For calendar 2006, Toyota now plans to make 9.06 million vehicles, up ten per cent from 2005, as the firm bids to replace General Motors as the world's largest automaker.
THE BIRMINGHAM POST