Toyota, whose solid growth could put it ahead of General Motors as the world's No. 1 automaker, reported a 34 percent rise in profit Tuesday for the quarter ended Dec. 31 as sales jumped in North America and Asia.
Toyota Motor Corp., the world's second-biggest automaker, marked a record group net profit of 397.6 billion yen ($3.3 billion) during the three months, up from 296.5 billion yen the same period a year earlier.
Sales for the quarter were also a record for the company at 5.33 trillion yen ($45 billion), up 15 percent from 4.64 trillion yen the previous year.
Koichi Sugimoto, auto analyst at Nomura Securities Co., said Toyota is finally raking in the benefits from the investments in plants and car development the automaker made in the past to keep up with growing global demand.
"The October-December quarter is when Toyota will start doing fantastic business in a real way," he said.
Toyota's growth comes at a time when U.S. automakers General Motors Corp. and Ford Motor Co. are struggling.
GM posted its largest annual loss in more than a decade in 2005, losing $8.6 billion. Ford chalked up a $2 billion profit for 2005, but that was down 42 percent from the previous year. Ford has announced a plan to cut 30,000 jobs and close 14 facilities by 2012.
Toyota said it expects to sell 7.95 million vehicles for the fiscal year ending March 31, above the 7.4 million vehicles sold the previous year but 80,000 vehicles fewer than the 8.03 million vehicles projected in November. Toyota said sales growth in North America was unlikely to offset anticipated drops in Japan and the rest of Asia from the earlier forecast.
Toyota's annual projection for fiscal 2005 is still fewer than GM's yearly sales, but if trends continue, Toyota will overtake the Detroit-based automaker in the next few years, some analysts say. Toyota has already passed Ford, based in Dearborn, Michigan, as the world's second-biggest automaker. GM sold 9.17 million vehicles worldwide in 2005, the most it has sold in 27 years.
Tsuyoshi Mochimaru, auto analyst for Deutsche Securities in Tokyo, said Toyota was definitely on its way to further growth although GM may also succeed in selling more cars, especially outside the United States.
"Toyota has achieved success by simply working hard to build quality cars and using its financial strength to make wise investments," Mochimaru said.
Toyota's global vehicle sales for the October-December period reached 1.98 million vehicles, up 8 percent from the same period a year earlier, as sales were strong in North America on the popularity of the Avalon sedan, Tacoma pickup and Prius hybrid cars. North American vehicle sales rose 12 percent from the previous year, Toyota said.
Vehicle sales remained at the same level from the previous year in Japan and Europe but jumped 11 percent in Asia from the previous year to 217,000 vehicles. Toyota maintained more than 46 percent market share in Japan, excluding the tiny minicar segment, although demand was relatively weak here.
A favorable exchange rate added 130 billion yen ($1.1 billion) to the quarterly results, the company, based in Toyota city, said in a statement.
A weaker yen tends to boost the earnings of Japanese exporters like Toyota when their overseas profits are converted into yen. The dollar was trading at 117 yen in the latest quarter compared to 106 yen a year earlier.
Also adding to Toyota's bottom line was the merger of bank UFJ Holdings Inc. with another financial group in October. Toyota, which owned shares in UFJ, recorded a gain of 143 billion yen ($1.2 billion) for shares it received in the combined Mitsubishi UFJ Financial Group Inc.
Toyota's results stand out even compared to other Japanese automakers, which have been taking advantage of their reputation for good mileage and reliability to gain market share recently, especially in North America, amid rising gas prices.
Honda Motor Co. recently reported its best ever quarterly sales although its profits were hurt by losses unrelated to its auto operations such as securities holdings. Nissan Motor Co.'s profit for the latest quarter edged up slightly as sales jumped 10 percent.
Toyota shares, which have gained 50 percent over the last year, finished at 6,120 yen ($51.50) in Tokyo, unchanged from the previous day.