Toyota Motor Corp. posted a stronger-than-expected 8.9 percent rise in quarterly net profit on buoyant sales in Western markets, and forecast modest growth this year as it adds production capacity all over the world.
Demand for Toyota's cars has climbed steadily in sputtering U.S. and European markets, driven by segment-leading models such as the Camry sedan and RAV4 crossover, while local brands have struggled to hold their own.
Toyota is set this year to end General Motors Corp.'s 76-year reign as the world's biggest automaker after the U.S. group last week forecast global sales of 9.2 million vehicles against Toyota's plan to move 9.34 million.
Toyota has ensured steady growth by spending on new factories, added capacity and research and development -- all of which has kept profit margins in check.
Given this level of spending, a possibly stronger yen and high input costs, Japan's top automaker forecast a modest rise in profits for this year, joining its local rivals in providing cautious guidance.
Toyota forecast annual operating profit of 2.25 trillion yen, up 0.5 percent from 2.239 trillion yen last year, for a seventh straight year of record earnings.
Net profit for January-March -- a quarter that saw Toyota overtake GM in global sales volume -- was 440.1 billion yen, well ahead of a consensus estimate for 416.1 billion yen. GM earned a net $62 million that quarter.
Excluding China, Toyota's sales in Asia declined last year along with the broader market, but the automaker is set to crank up volumes in 2007 with a new factory in Thailand. Toyota will also open a new plant in China soon to meet surging demand.
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