Toyota posts 90 percent rise in first-half net profits

TOKYO October 31, 2002: Kienji Hall writing for AP reported that Toyota Motor Corp., said Wednesday its profit for the fiscal first half climbed 90 percent from a year ago on strong U.S. and European sales despite the slowing economies here.

Toyota said it earned 553 billion yen ($4.5 billion) in the six months ended Sept. 30, up from 291 billion yen a year earlier. The company said the figures were the best ever in the first six months of a fiscal year.

Sales also surged to their highest ever for a first-half to 7.88 trillion yen ($64.1 billion), up 15 percent from 6.83 trillion yen last year. Overseas sales had the biggest gains, and accounted for two-thirds of Toyota's worldwide sales.

Toyota sold 3.01 million vehicles worldwide, up 12 percent from 2.69 million last year.

Overseas sales rose 23 percent to 1.99 million vehicles, led by the hot-selling Camry and Corolla sedans and the ES300 sedan from its luxury Lexus brand in North America, where the Japanese carmaker has about 10 percent market share and is the top-selling foreign brand.

Toyota president Fujio Cho said the automaker aims for annual sales of 2 million vehicles in North America and 800,000 vehicles in Europe. It also seeks a larger market share in Japan, where it already has a dominant 42 percent.

Toyota didn't offer a full-year earnings forecasts, but predicted its global auto sales would reach 6.2 million vehicles by year-end.

The Japanese automaker wants to make inroads in the European market, setting ambitious targets and recording consistent sales gains with its popular Yaris compact and Corolla at a time when a slowdown there is crimping overall auto sales. But it continues to lag behind European carmakers in diesel-engine cars, which are best-sellers there.

Cho said Toyota continues to expand output at Europe-based plants and expects to churn out 100,000 Toyota-brand small cars annually starting 2005 through a joint venture sealed last year with PSA Peugeot Citroen. Toyota has about 4.4 percent market share in Europe.

Toyota's rising fortunes mirror those of Nissan Motor Co., which raised forecasts for full-year profits last week. Honda Motor Co. also reported a quarterly profit uptick last week but warned of pressure from a U.S. economic slowdown and stiff competition at home.

Toyota, based in Toyoda city in central Japan, said cost cutbacks boosted the bottom line by 150 billion yen ($1.22 billion), and a marketing push added 80 billion yen ($650 million).

The strength of the U.S. dollar and euro increased earnings by another 90 billion yen ($731 million), the company said. The dollar rose to 123 yen from 122 yen a year ago, while the euro rose to 117 yen from 108 yen. A strong dollar and euro helps the earnings of Japanese exporters like Toyota by inflating the value of overseas income when converted into yen.

Those gains offset about 95.7 billion yen ($778 million) in costs due to research and development and higher labor expenses, the company said.