Toyota Profit Rises 7.5% on Fuel-Efficient Cars, Asia

Toyota Profit Rises 7.5% on Fuel-Efficient Cars, Asia

Feb. 5 (Bloomberg) -- Toyota Motor Corp., the world's second-largest carmaker, said profit climbed 7.5 percent after its fuel-efficient vehicles attracted customers in the U.S., Europe and Asia.

Net income rose to 458.7 billion yen ($4.3 billion), or 144.43 yen a share, in the three months ended Dec. 31, from 426.8 billion yen, or 133.13, a year earlier, the company said in a release today. Sales rose 9.2 percent to 6.71 trillion yen.

Expansion in Russia, China and other emerging markets fueled Toyota's growth, offsetting slowing U.S. demand and a drop in domestic sales. Toyota, vying with General Motors Corp. to be the world's largest carmaker, may build a second plant in Russia and plans to raise sales in China 43 percent this year.

``The importance of emerging markets is increasing as demand in the U.S. is expected to slip,'' said Hitoshi Yamamoto, who manages the equivalent of $5.5 billion in Japanese equities as chief executive officer of Fortis Asset Management in Tokyo. ``Toyota will continue gaining from its fuel-efficient cars'' because of rising gasoline prices.

The Toyota City, Japan-based automaker expects net income to rise 3.4 percent to 1.7 trillion yen in the year ending March 31, it reiterated today.

Toyota fell 2 percent to 5,780 yen at the 3 p.m. close on the Tokyo Stock Exchange, before the company announced earnings.

Operating profit, or sales minus the cost of goods sold and selling, general and administrative expenses, rose 4.7 percent to 601.6 billion yen in the fiscal third quarter, Toyota said.

Net income was in line with the 461.6 billion yen average of five analyst estimates compiled by Bloomberg.

Surpassing Ford

President Katsuaki Watanabe, 65, led Toyota past Ford Motor Co. in the U.S. last year. The automaker narrowed its gap with GM in global sales last year. Both companies increased sales in Russia, China and other emerging markets.

Toyota in December opened a plant in St. Petersburg, its first in Russia, to assemble as many as 50,000 vehicles a year. The company Dec. 21 said it aims to raise production capacity to 200,000 to 300,000 vehicles a year in the future. The automaker also expects sales in China to reach 700,000 vehicles this year, helped by the introduction of the Yaris compact.

Toyota's global vehicle sales to dealers rose to 2.28 million in the three-month period from 2.16 million a year earlier. It sold 241,000 vehicles in Asia excluding Japan, up 18 percent. European sales were little changed at 308,000.

Prius Sales

In the U.S., gasoline prices near a record $3 a gallon, helped sales of Toyota's Prius jump 70 percent to 181,221 last year. Honda Motor Co., Japan's second-largest automaker, said Jan. 30 net income for the three months ended Dec. 31 rose 38 percent because of higher sales of fuel-efficient cars in the U.S. and Asia. Nissan Motor Co. boosted net income 27 percent in the quarter, it said on Feb. 1.

Toyota and Honda are rated the most fuel-efficient automakers by the U.S. government. Increased sales of the Prius, the top-selling hybrid, helped Toyota increase the average fuel economy of its 2007 models to 29 miles per gallon from 28.4 mpg a year earlier, according to the Environmental Protection Agency.

BLOOMBERG