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.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.