Toyota's first quarter profit rises 10%
Japanese carmaker Toyota has reported a 10% increase in profits for the first quarter of its fiscal year, helped by the weak yen and cost cuts.
For the period from April to June, net income rose to 646.3bn yen (£3.34bn; $5.2bn) from 587.7bn yen a year ago. The company also raised its full-year sales forecast to 8.95 million units from 8.9 million. Last week, it emerged that Toyota was overtaken by VW as the world's largest carmaker in the first half of the year. The relative weakness in the Japanese yen has helped to make Toyota more competitive abroad while inflating the value of its repatriated earnings from overseas. However, Toyota - along with other carmakers - has also suffered from problems with airbags, made by supplier Takata, that were fitted in its cars. Toyota and other Japanese car makers have had to recall millions of cars worldwide over the faulty airbags. US recovery Globally, Toyota sold 2.1 million vehicles during the quarter, about 127,000 fewer vehicles from a year earlier. 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." Toyota's sales in Japan were slightly lower, but sales in North America rose while Europe remained almost flat. On the back of a weaker yen, Japanese car exports have benefitted from the US economy's recovery in the past months. In Europe, economic conditions have improved overall despite the recent turmoil over the Greek debt crisis. 'Two-pronged approach' Sales in Asia, South America Africa and the Middle East saw the biggest falls, with emerging markets affected by a slowdown in economic growth. In China, the carmaker has seen increased competition from local carmakers, Vivek Vaidya, an auto analyst with consultancy Frost & Sullivan, told the BBC. "China is always the market where you will have significant competition from the lower end, from cheaper alternatives," he said. "So Toyota is using a two-pronged approach - their technology and their quality - to try and increase their market share in China in the future." Toyota also announced a reorganisation of its Chinese operations, announcing a joint venture plant in Tianjin. The new line is to be operational by 2018 and is to boost capacity by 100,000 vehicles per year.