Toyota doubles operating profit in North America to JPY64.9 billion

Article by Anita Panait, on November 6, 2012

Toyota Motor Corp. posted a 45-percent jump in sales in North America in the second quarter ended Sept. 30, 2012, to 598,000 vehicles, from 413,000 units in the same period in 2011. The company’s strong sales allowed the Japanese carmaker to double its operating profit in the region to JPY64.9 billion ($807.1 million) in its second fiscal quarter, from JPY32.5 billion in the same period in the last fiscal year.

The carmaker attributed its strong showing in its second fiscal quarter partly to increased output. In 2011, the company’s sales were heavily hit by lack of inventory as the carmaker was much affected by the quake that shook Japan in March that year. Toyota Executive Vice President Satoshi Ozawa said that the carmaker’s improved operating income in North America was a result of increased vehicle production and sales, despite the decreased contribution from financial services.

With the increasing demand for vehicles in the US and its normalizing supply chain, Toyota hiked its North American production by 42% to 391,000 vehicles in the quarter. Toyota’s strong showing in the region allowed it to mitigate its diving sales in China, where protest sparked by a territorial dispute with Japan resulted to lower demand.

Thanks to its performance in North America, Toyota has updated its full year 2012 forecast to reflect an increase in net profit expectation by 2.6% to JPY780 billion ($9.7 billion). The carmaker saw its net profit for the second quarter ended Sept. 30, 2012 more than triple to JPY257.9 billion, thanks to strong sales in North America and Southeast Asia.

In October, Toyota posted a 16-percent year-on-year increase in sales in the US, allowing the carmaker and its Lexus luxury brand to grab 13.9% market share, up from 12.3% for the same period in 2012. In China, Toyota and its Chinese joint ventures logged a 49-percent and 44-percent year-on-year drop in sales in September and October 2012 respectively.

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