Toyota profit soars on weaker yen

<p>The carmaker posted a 10% increase in profits.</p>

Japanese carmaker Toyota today (August 4th) posted a ten per cent increase in profits for the first quarter of its fiscal year. Net income jumped to 646.3 billion yen (£3.34 billion) for the period from April to June, up from 587.7 billion yen a year ago.

The company thanked a weaker yen along with costs cuts for the positive results. Japanese car exports have also benefited from the US economy's recovery in the past few months.

In a statement, Toyota managing officer Tetsuya Otake said: "Favourable foreign exchange rates and cost reduction efforts were main positive factors, while decreasing vehicle sales and increased expenses to support initiatives for enhancing competitiveness were negative factors."

The company also raised its full-year sales forecast to 8.95 million units from 8.9 million.

Toyota struggled in Asia

However, Toyota said it sold 127,000 fewer vehicles globally during the quarter from a year earlier, amounting to 2.1 million units. It trimmed its 2015 calendar year sales forecast to 10.12 million vehicles from 10.15 million units.

Sales in Asia, South America Africa and the Middle East suffered the most due to the global slowdown in economic growth.

The company is also facing difficulties in China, where competition is rife. "Our April-June sales volume growth [in China] was strong, but we can’t be optimistic when it comes to profits,” Tetsuya Otake, Toyota’s managing officer, said at a news conference in Tokyo.

Executives said Toyota will start selling a gas-electric hybrid version of the Corolla and Levin sedans in China later this year, which is expected to boost sales.

The carmaker also revealed it would invest 59 billion yen to build a new line at its plant in the Chinese town of Tianjin that will start operating in 2018.

Toyota has been focusing on squeezing out productivity gains and overhauling its production methods in a bid to slash development costs.

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