Toyota Motor Corp on Friday posted a 19 per cent profit jump for the first quarter (Q1) on the back of higher sales and cost reductions in Asia.
Operating profit at Japan’s largest automaker was 683 billion yen for the Q1. That compared with the 639 billion yen average of seven analyst estimates compiled by Thomson Reuters I/B/E/S.
Global retail vehicle sales rose 1.0 per cent to 2.6 million units in the quarter, boosted by an 8.5 per cent lift in Asia.
For the first six months of 2018, demand for the remodeled Camry helped increase Chinese sales by 5.4 per cent, while Thai sales jumped 26 per cent.
Together, sales in those countries helped drive a 40.2 per cent rise in first-quarter profit in Asia.
In North America, Toyota’s biggest regional market, sales rose 3.2 per cent due to a rise in demand for its pick-up trucks. Still, profit in the region fell 29 per cent as sales incentives continued to weigh.
At home, sales fell 6.3 per cent, but profitability rose 24 per cent due to cost reductions and an increase in vehicles made in Japan and exported overseas, reports Reuters.
The automaker maintained its full-year profit forecast to slip 4.2 per cent to 2.3 trillion yen, though it is now factoring in one US dollar being worth 106 yen, from an earlier forecast of 105 yen.
Overall, it still anticipates a stronger yen to offset the benefits of cost cutting and record-high global vehicle sales.
Like its domestic rivals, Toyota is bracing for a possible rise in US auto import tariffs, which could cloud its outlook as tariffs would raise the cost of selling vehicles in one of its biggest markets.
The United States in May launched an investigation into whether imported vehicles pose a national security threat, and President Donald Trump has repeatedly called for tariffs of up to 25 per cent.
Toyota, which sells more cars in the United States than any other Japanese automaker, locally produces roughly half of all of the vehicles sold in the country. It imports the balance mainly from Japan, Canada and Mexico.
Its share of localized production is lower than the 75 percent of Honda Motor Co Ltd (7267.T) and 60 percent of Nissan Motor Co Ltd.
Toyota has been a vocal opponent of tariffs, arguing that 25 per cent would increase the cost of its US-made Camry sedan, Tundra pick-up truck and Sienna minivan by up to $3,000 per vehicle.
