updated 2/5/2008 7:56:33 AM ET 2008-02-05T12:56:33

Toyota’s profit for the October-December quarter rose 7.5 percent from the previous year as booming sales in China, Africa and South America offset declining U.S. sales and a stronger yen.

The Japanese automaker — in a neck-and-neck race against General Motors Corp. for the top spot in global vehicle sales — sold 2.281 million vehicles in the fiscal third quarter, up 5.8 percent from the same period a year ago, it said Tuesday.

The maker of Prius gas-electric hybrids and Corolla subcompacts kept its sales forecast for the fiscal year through March unchanged at 8.93 million vehicles, up 4.8 percent from the previous fiscal year, saying that market growth in new markets will make up for weaker-than-expected vehicle sales in the U.S., Europe and Japan.

Toyota Motor Corp. also left its profit projection at 1.7 trillion yen ($15.91 billion) for the fiscal year on 25.5 trillion yen ($238.61 billion) in sales.

“We posted our highest ever quarterly results for the third quarter in both revenues and profits, despite the severe business environment,” said Toyota Senior Managing Director Takeshi Suzuki.

The manufacturer, which also makes Lexus luxury cars, has been flourishing as soaring gas prices boost the appeal of its smaller models reputed for fuel efficiency.

Toyota’s quarterly sales growth in emerging markets, including China, Africa and South America, more than made up for declines in North America, where sales fell 8,000 vehicles from a year earlier to 756,000 vehicles.

Group profit for the three months ended Dec. 31 rose to 458.6 billion yen ($4.29 billion), a record for a fiscal third quarter. Toyota had earned 426.7 billion yen the same period the previous year.

Quarterly sales rose 9.2 percent to 6.710 trillion yen ($62.79 billion).

Robust sales also made up for the 20 billion yen ($187.1 million) the carmaker lost from the effects of an unfavorable exchange rate. Toyota said the dollar cost about 113 yen during the third fiscal quarter, down from 118 yen in the same period a year ago.

A weak dollar erodes the value of overseas earnings for Japanese companies like Toyota, and the dollar’s further decline in recent months possibly puts more pressure on Toyota in the year ahead.

Profit at Nissan Motor Co. for the fiscal third quarter jumped 26.6 percent jump to 132.22 billion yen ($1.24 billion) as sales surged 18.2 percent.

Honda Motor Co., the nation’s second-biggest automaker, reported a 38.1 percent jump in profit for the October-December quarter to 200 billion yen ($1.87 billion)

In contrast, Ford Motor Co. lost $2.8 billion in the October-December quarter, and offered buyouts to its 54,000 U.S. hourly workers, made salary cuts and trimmed production.

General Motors, which reports earnings next week, barely retained its crown as the world’s No. 1 automaker last year, selling a mere 3,000 more vehicles than Toyota did. Toyota sold 9.366 million vehicles in 2007 globally, while Detroit-based GM sold 9,369,524 vehicles.

For the first nine months of fiscal 2007, Toyota’s profit surged 16.4 percent to 1.401 trillion yen ($13.11 billion). Sales for the period climbed 11.9 percent to 19.722 trillion yen ($184.54 billion).

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