August 3, 2018 08:16 CET
TOKYO — Toyota Motor posted a 19 percent jump in quarterly profit, its best quarterly performance in two-and-a-half years, on the back of higher sales and cost reductions in Asia.
Operating profit was 682.6 billion yen ($6.11 billion) for April-June, versus 574.3 billion yen a year earlier.
Global retail vehicle sales rose 1 percent to 2.6 million units in the quarter, boosted by an 8.5 percent lift in Asia.
For the first six months, demand for the remodeled Camry helped to increase Chinese sales by 5.4 percent, while Thai sales jumped 26 percent.
Together, sales in those countries helped drive a 40.2 percent rise in first-quarter profit in Asia.
N.A. incentives hit
In North America, Toyota’s biggest regional market, sales rose 3.2 percent due to a rise in demand for its pickups, including the Tacoma and Tundra. Still, profit in the region fell 29 percent as sales incentives continued to weigh.
In Japan, sales fell 6.3 percent, but profitability rose 24 percent due to cost reductions and an increase in vehicles made in Japan and exported overseas.
The automaker maintained its full-year profit forecast to slip 4.2 percent to 2.3 trillion yen, though it is now factoring in one U.S. 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 U.S. auto import tariffs, which could cloud its outlook as tariffs would raise the cost of selling vehicles in one of its biggest markets.
The U.S. 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 percent.
Toyota, which sells more cars in the U.S. 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 and 60 percent of Nissan Motor.
Toyota has been a vocal opponent of tariffs, arguing that 25 percent would increase the cost of its U.S.-made Camry sedan, Tundra pick-up truck and Sienna minivan by up to $3,000 per vehicle.
In Europe, operating income increased by 2.6 billion yen to 23.1 billion yen, mostly on cost-cutting, and vehicle sales increased 12,295 to 252,639.
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