Toyota paces towards bigger goals as Q2 profit surges

At a time when U.S. automakers are struggling, Toyota Motor Corp., Japan's biggest automaker by sales is basking in the glory of profit, boosted by strong sales in the North American and European markets. The Japanese automaker said Tuesday its net profit surged 34 percent in the July-September quarter.

For the financial second quarter, Toyota Motor Corp. posted a net profit of 405.7 billion yen ($3.44 billion), up 33.5 percent from the 303.7 billion yen reported for the same period last year.

Driven mainly by the popularity of its Aygo and Yaris models the company’s European sales went up 18.3% to 589,240 units while the fuel efficient Yaris and sports utility models RAV4 and FJ Cruiser helped to boost up the sales in North America by 17.6% to 1.46 million vehicles.

"Despite increased raw-material costs and business expansion expenses, we aim to achieve higher levels of revenue and profits through further increase of vehicle sales and cost reductions," Toyota's spokesman Mitsuo Kinoshita said in a statement.

The automaker is pacing towards taking over General Motors Corp. and becoming the biggest automaker in coming years. "It looks like Toyota‘s efforts to overtake GM are going according to plan," said Shiichiro Kobayashi, Mitsubishi UFJ Research and Consulting. "Basically, Toyota is eating the pie of the Big Three in the United States."

The company was initially expecting a profit of 1.31 trillion yen for the full fiscal year through March but with its speeding progress the profit forecast has now been raised to 1.55 trillion yen ($13.14 billion).

Toyota officials repeated their pledge Tuesday to preserve the company's reputation for excellence while keeping down costs as the company had to face a string of potentially damaging recalls because of defective parts, and investigations of the company in the United States and Japan.

"Our business is expanding," said Takeshi Suzuki, Toyota senior managing director. "The biggest task is how to maintain quality and create cars that are competitive in terms of prices."

According to a recent Japanese media report, Toyota is planning to increase overseas production by 40 percent of its 2005 level to 5 million vehicles by 2008. The company is also planning to work together with Isuzu Motors Ltd. to research on and develop small diesel engines, including cooperating on emission-control technologies as well as alternative fuel technologies.

Toyota's share price finished up 0.99 percent at 7,100 yen ($60.13) at the Tokyo Stock exchange.