Toyota half-year profit rises nearly 12%

Despite a decline in global vehicle sales, Japanese auto giant Toyota Motor Corp reported encouraging results for the first half-year ended September, posting a 11.6-per cent jump in net income and 8.9-per cent in revenue compared to the same period last fiscal year.

Net income increased to ¥1.26 trillion ($10.3 billion) from ¥1.13 trillion ($9.3 billion) in the first half on the back of higher productivity and weak yen, while sales increased to ¥14.09 trillion from ¥12.94 trillion for the same period.

The world's biggest automaker sold 4.28 million units globally in the first six months, down from 4.48 million last year, resulting in a decline of 4.4 per cent.

Commenting on the results, Toyota managing officer Tetsuya Otake said, ''Despite decreased vehicle sales and increased expenses to promote the Toyota new global architecture and research into cutting-edge technologies, progress in cost reduction and other profit improvement activities, in addition to favorable foreign exchange rates, contributed to the increase in operating income.''

In most geographic regions, vehicle sales declined, except in North America, where it registered a 1.3-per cent increase at over 1.4 million, apparently due to low interest rate which kept consumer appetite strong.

However, operating income plunged 12 per cent due to increase in expenses and recording of valuation losses on interest rate swaps, the company said.

In Japan, the number of vehicles sold declined 4.4 per cent to over 984,000 as sales suffered due to last year's sales tax rise. However, operating income rose 33 per cent mainly due to the effects of changes in exchange rates and cost reduction efforts.

In Asia, excluding Japan, sales were down over 13 per cent at around 654,000 units, although operating income increased nearly 15 percent thanks to exchange rate fluctuations and efficiency improvement.

In Europe, the sales decline was 1.7 per cent at around 407,000, while operating income increased 9 per cent.

In other regions, which include Central and South America, the Middle East, Africa and Oceania, vehicle sales dropped 7 per cent to around 820,000 while operating income was up 14 per cent.

According to some analysts, the steady performance in North America is offsetting sales in Asian emerging markets.

For the full year ending March 2016, the auto giant has trimmed the vehicle sales forecast by 200,000 to 8.75 million units from 8.95 million units, looking at latest trends. The company has also revised its revenue and profit forecasts for the current year.

Toyota has been battling with scandal-hit German carmaker Volkswagen AG for the top spot as the world's biggest automaker.

It regained the crown in the September with 7.5 million vehicles in the first 9 months of 2015, edging up from Volkswagen's 7.43 million vehicles and General Motors' 7.2 million. Volkswagen had overtaken Toyota for the first time during January-June period.