TOKYO – Toyota's (TM) first-quarter profit quarter climbed 9 percent as the automaker marked its seventh straight fiscal year of record sales amid robust demand for its Corolla, Camry and Lexus models.
Toyota Motor Corp., which beat General Motors (GM) in worldwide vehicle production and sales in the first quarter for the first time ever, reported a quarterly group profit of 440.1 billion yen ($3.67 billion) from 404 billion yen the same period the previous year, the manufacturer said Wednesday.
Toyota's sales are surging as soaring gas prices boost the appeal of its models, which are reputed worldwide for fuel-efficiency, including gas-and-electric hybrids like the Prius.
Analysts say Toyota is growing so quickly it's just a matter of time before it overtakes problem-laden General Motors Corp. of the U.S. to become the world's No. 1 automaker — a title that technically hinges on worldwide vehicle production for an entire year.
Toyota's sales in the fourth quarter rose 10 percent to 6.3 trillion yen ($52.5 billion) from 5.75 trillion yen the previous year, as strong sales in North America and Europe offset stagnant sales in Japan.
Detroit-based GM, the world's largest automaker the last 76 years, is seeing its U.S. market share shrink, and has announced a restructuring plan to stem billions in losses it racked up in 2005 and 2006. Earlier this month, GM reported a $62 million profit in the first quarter.
Toyota President Katsuaki Watanabe was typically understated when asked about the prospects of beating GM.
"Rather than think about other companies, I feel that we must do our utmost to satisfy customers around the world," he said. "There is plenty left for us to do."
He said his company aims to boost sales in "every region" around the world, while acknowledging the auto industry remains tough, with many obstacles.
"We see them as opportunities, and we will strive to continue to achieve growth," he told reporters at a Tokyo hotel.
Toyota sold 2.35 million vehicles worldwide in the January-March period, surpassing the 2.266 million vehicles GM sold in the quarter.
Toyota said its group production totaled 2.37 million vehicles globally in the quarter through March, slightly more than the 2.34 million vehicles that GM said it produced around the world for the same period.
When excluding joint ventures, not covered under consolidated earnings, Toyota said Wednesday it produced 2.13 million vehicles globally in the quarter.
Shinya Naruse, auto analyst with Nomura Securities in Tokyo, said toppling GM in global vehicle production is just the latest in Toyota's victories because it has already beaten GM in profit, which is more important.
"But it is a very visible step, and it's only a matter of time," he said. "It's difficult to give one explanation for Toyota's success but it's simply its ability to come up with attractive products that sell."
Naruse notes that Toyota is not only performing well next to U.S. auto companies, including Ford Motor Co. and the Chrysler unit of DaimlerChrysler AG (DCX), but also against Japanese rivals Honda Motor Co. and Nissan Motor Co.
Both Honda and Nissan saw a decline in profit in the latest quarter.
For the full fiscal year ended March 31, Toyota posted a 1.64 trillion yen ($13.7 billion) profit, up 20 percent from 1.37 trillion yen the previous year. Fiscal 2006 group sales jumped 14 percent to 23.9 trillion yen ($199.5 billion) from 21 trillion yen in fiscal 2005.
For the current fiscal year through March 2008, Toyota expects even better news with 1.65 trillion yen ($13.8 billion) profit on 25 trillion yen ($209 billion) sales. It also expects to sell 8.89 million vehicles, up 4 percent from 8.5 million sold in the fiscal year just ended.
GM sold 9.17 million vehicles in 2005, and 9.09 million last year. In 2006, Toyota's global production was about 9 million vehicles, while GM and its affiliates produced 9.18 million vehicles worldwide.
Toyota shares, which have gained about a fifth in value over the past year, fell 0.6 percent to 7,200 yen ($60). The market closed before the earnings were announced.