Toyota raises full-year profit forecast

toyota Image copyright Getty Images
Image caption Toyota has seen strong sales in its key market of North America

Japan's biggest car manufacturer, Toyota, has raised its full-year profit forecast by 12.4%, citing a weaker yen and cost cutting efforts.

It has also raised its sales forecast for its key market of North America, where it has been enjoying a strong performance.

The firm said net profit may reach as much as 2tn Japanese yen ($17.5bn; £10.96bn) for the year to March 2015.

The carmaker's earlier forecast was for a net profit of 1.78tn yen.

Toyota's executive vice president, Nobuyori Kodaira, said the firm had also raised its forecasts for operating profit and revenue for the period.

"We are revising our operating income forecast upwards by 200bn yen to 2.5tn yen," he said.

He said this reflected the progress made on marketing and in reducing costs, and also the change in foreign exchange rates.

Image copyright Getty Images
Image caption Toyota's profit for the six months to September this year rose by more than 12%

Asian sales sag

Toyota also reported results for the six months to September, with net profit up 12.6% to 1.12tn yen.

The carmaker said its vehicle sales for the period had fallen in Asia, including in Japan, but had increased in North America and Europe.

The net profit figure includes profits made with the firm's joint venture partners in China: China FAW Group and Guangzhou Automobile Group.

The Japanese firm said its vehicle sales in North America had come to 1,395,105, up from 97,061 a year ago, but that in Japan, vehicle sales had decreased by 70,977 to 1,030,229.

The news follows results from Toyota's rival Nissan, which reported on Tuesday a 25% increase in half-year profits.

Like Toyota, Nissan said strong sales in its key market of North America had helped to offset weaker demand in some other markets.

Weaker yen

Japan's firms, especially those relying on exports, have benefited from the weakness in the yen, which helps bring down the cost of Japanese goods sold abroad.

Japan's central bank, Bank of Japan, announced last week that it would expand its monetary stimulus measures, a move which has seen the yen weaken to a near seven-year low.

The weaker yen has also helped big manufacturers such as Toyota and Nissan offset slower sales in Japan, where a sales tax rise earlier this year dented consumer activity.

Toyota's positive full-year forecast comes despite a recall of 1.75 million vehicles worldwide over faulty brake installations and fuel component issues.

The latest brake defect was found in some models of Toyota's Crown Majesta, as well as the Noah and Voxy models produced between June 2007 and 2012.

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