updated 5/10/2006 12:27:18 PM ET 2006-05-10T16:27:18

Toyota’s profit in the January-March quarter jumped 39 percent as the world’s No. 2 automaker marked its sixth straight record fiscal year of booming sales, the company said Wednesday.

Toyota Motor Corp. recorded a net profit of 404.1 billion yen ($3.6 billion) in the final quarter of fiscal 2005, up from 290.7 billion yen in the same quarter the previous year.

Quarterly sales totaled 5.75 trillion yen ($51.6 billion), up 18 percent from 4.88 trillion yen a year ago. The surge in sales means Toyota is now just slightly behind General Motors Corp. as the world’s largest automaker in terms of revenue. GM last month reported its sales rose to a record $52.2 billion in its latest quarter from $45.8 billion in the first quarter a year ago.

With sales booming around the world, Toyota is on pace to overtake General Motors Corp. as the world’s biggest automaker. Its models’ reputation for good mileage has helped Toyota snatch U.S. market share away from GM and Ford Motor Co. at a time when gas prices are soaring.

Toyota said vehicle sales rose in every major region of the world except for Japan, where overall auto sales have stagnated lately. Toyota sold 7.97 million vehicles around the world in fiscal 2005, up from 7.4 million vehicles the previous year.

Toyota is banking on the success of fuel-efficient hybrid technology, which allows cars to switch between a gasoline engine and electric motor, to drive its global growth.

The company is due to roll out its hybrid Camry this summer, and it could be the vehicle that shows whether hybrids will join the mainstream.

In the United States, Toyota and its Lexus luxury division accounted for seven out of 10 hybrid sales in 2005, between the top-selling Toyota Prius, at 53 percent of all U.S. hybrid sales, and the Lexus RX400h crossover, at 9.7 percent.

Toyota said it expects to sell 8.45 million vehicles globally in the fiscal year ending March 2007, up 6 percent from fiscal 2005.

Detroit-based General Motors earned $445 million in the January-March period after a revision from an initial report of a loss for accounting changes. GM, which doesn’t give yearly vehicle sales forecasts, sold 9.17 million vehicles last year.

While Toyota is on a roll around the world, analysts warn some risks may be ahead, such as the weaker dollar, which tends to erode the overseas earnings of giant Japanese exporters when converted into yen.

And indeed, Toyota, which in the past had not given group income forecasts, said profits are expected to dip 4.5 percent for the fiscal year through March 2007 to 1.31 trillion yen ($11.7 billion) on 22.3 trillion yen ($200 billion) sales, up 6 percent.

“The big question is whether Toyota will be able to maintain good profits efficiently while selling more cars,” said Koichi Sugimoto, auto analyst at Nomura Securities Co. in Tokyo.

In fiscal 2005, a favorable exchange rate added 300 billion yen ($2.7 billion) to its books, while cost reduction efforts another 130 billion yen ($1.2 billion).

The company is forecasting the dollar to trade at 110 yen this fiscal year. It traded at about 113 yen in the fiscal year just ended.

Toyota’s profit for the fiscal year through March rose 17 percent to 1.37 trillion yen ($12.3 billion) from 1.17 trillion yen the previous year, the fourth straight record income for Toyota. Sales for the year climbed 13 percent to 21 trillion yen ($188 billion), the sixth straight record.

Just about the only recent trouble Toyota has encountered is a $190 million sexual harassment lawsuit filed last week against the president and CEO of Toyota Motor North America, Hidetaka Otaka.

Toyota said Tuesday that Otaka, 65, has stepped down, although he claims he is innocent of the charges brought by Sayaka Kobayashi, his former personal assistant, who claimed he made repeated unwanted sexual advances.

Toyota President Katsuaki Watanabe said the case shouldn’t have much impact on the company’s business results.

In another shuffle, Toyota said Wednesday that Chairman Hiroshi Okuda, who oversaw Toyota’s rise in recent years as a global automaker, will step down to senior adviser while staying on as member of the board.

Fujio Cho, former president and now vice chairman, who helped Toyota establish itself as a member of corporate America, replaces Okuda as chairman, the company said in a statement.

The move is unlikely to have a major impact on Toyota’s strategy as Watanabe, who replaced Cho, has inherited the global growth strategy that was forged under Cho and Okuda before him.

Toyota is increasing production in various regions, such as a plant in Texas that begins production this year, as well as in China, where Toyota later this month rolls out its first Camry — the best-selling car in the U.S. — to meet auto demand there that’s ballooning. Production expansions are also in the works in Canada, Thailand, Mexico, Russia and South Africa.

Toyota sold 2.6 million cars in North America, up from 2.3 million the previous year, and 880,000 vehicles in the rest of Asia, up from 833,000.

Toyota shares, which have gained 67 percent over the past year, dipped 0.7 percent to 6,680 yen ($60) in Tokyo shortly before earnings were disclosed.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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