Toyota Motor Corp. posted JPY587.8 billion ($5.7 billion) in net income in the fiscal first quarter ended June 2014, its best quarterly results ever. Toyota posted a JPY692.7 billion ($6.76 billion) in operating profit for the period. The carmaker’s net income surge was traced to higher SUV sales in the United States, which were more than enough to offset shrinking demand in Japan.
Toyota even outgrew the US auto industry, growing 11 percent in the April-to-June period. The industry grew 6.9 percent. The growth has been attributed to increased consumer confidence, recovering payrolls and low interest rates.
Toyota posted a 45-percent jump in operating profit in North America operating profit for the quarter ended June to JPY149.7 billion, adding that cost cuts and a weaker yen helped to boost earnings.
Last month, Toyota's sales in the US surged 12 percent in July, enough to top Ford Motor as second-best seller for the month. Mark Yockey, a managing director at Artisan Partners, remarked that Toyota is selling a lot of high-end SUVs, noting that there is a “waiting line” to buy Highlanders in the US.
He added that Highlanders return higher margins than Corollas. Toyota raised its sales projection for North America to 2.71 million vehicles from 2.62 million for the fiscal year ending March 2015.
The carmaker, however, reduced its sales projection for Asia – excluding Japan -- 1.58 million vehicles from 1.63 million. Full-year sales forecast for Japan was still at 2.21 million.
It slightly hiked its sales projection in Europe to 860,000 units from 850,000. Japan’s first sales-tax hike in 17 years in April curbed demand for new vehicles in the country and Toyota even saw its local sales fall 10 percent year-on-year to 319,460 vehicles.
For the full year 2014, Toyota trimmed its global group-wide forecast by 110,000 vehicles to 10.22 million vehicles, so as to reflect weakness in emerging markets.
Managing Officer Koki Konishi remarked that conditions in Thailand, India, Brazil and other emerging markets are weak, although the carmaker is trying to get an additional 50,000 vehicles from Japan to offset some of the weakness and to sell around 2.3 million in the US.