Toyota Motor Corp. (search) reported Tuesday a nearly 29 percent rise in profit for the latest quarter on strong sales in North America and Europe, prompting Japan's top automaker to lift its vehicle sales forecast for the full fiscal year.

Toyota's net group profit for the April-June quarter totaled 286.6 billion yen ($2.6 billion), up from 222.5 billion yen the same period a year ago. Sales jumped 10 percent to 4.51 trillion yen ($41 billion) from 4.09 trillion yen.

"Our ongoing efforts to introduce products that meet the needs of our customers as well as the strengthening of our production and sales organization led to increased profits in all regions," Toyota executive vice president Ryuji Araki said.

Toyota raised its global vehicle sales target for the fiscal year ending March 31, 2005, to 7.2 million vehicles, an increase of 180,000 vehicles from an earlier forecast in May. Toyota sold 6.7 million vehicles around the world last fiscal year.

Toyota has recently marked success with its Prius (search) models, which run on both an electric motor and a regular gasoline engine to deliver good mileage and an ecological ride. Although other automakers also sell or are developing such hybrid vehicles, Toyota has an edge in hybrids.

Toyota said Tuesday that it plans to boost the monthly production capacity of the Prius, now made solely in Japan, to 15,000 vehicles from 10,000, starting in the first half of next year.

In the first fiscal quarter, Toyota sold 1.79 million vehicles worldwide, up by more than 12 percent from 1.59 million a year ago. Sales in North America rose by 63,000 vehicles, or 12 percent, to 572,000 vehicles, partly because of the popularity of the Sienna truck model.

In Europe, models made there such as the Corolla Verso (search) helped boost sales by 13,000, or nearly 6 percent, to 247,000 vehicles in the quarter.

Japan, where the auto market has long been sluggish, was one region where Toyota sold slightly fewer vehicles at 538,000, down nearly 1 percent from a year ago. But Toyota's market share in Japan excluding tiny minicars stood at 46.1 percent, the highest ever for the company for quarterly results.

Sales in other regions, such as Asia, Africa and South America, were strong, climbing by about 40 percent from the previous year. Sales in Asia outside Japan recorded a dramatic 65 percent rise, and Toyota is expecting the numbers to grow, it said.

Toyota said marketing efforts added 170 billion yen ($1.5 billion) to the quarterly results, while cost cuts added another 40 billion yen ($361 million), outpacing operating losses, including 70 billion yen ($631 million) from an unfavorable exchange rate.

The U.S. dollar cost 110 yen in the latest quarter, down from 119 yen a year ago, according to Toyota. A strong yen hurts the earnings of Japanese exporters like Toyota.