Toyota’s Quarterly Profit up 10 Percent on Cheap Yen, Cost Cuts

TOKYO (AP) -

Toyota’s profit for April-June rose 10 percent on perks from a cheap yen and cost-reduction efforts that offset lower vehicle sales.

Toyota Motor Corp. had a fiscal first-quarter profit of 646.3 billion yen ($5.2 billion), up from $587.7 billion a year earlier. Quarterly sales increased by 9 percent to 6.98 trillion yen ($56.3 billion), the automaker said Tuesday.

But it sold about 127,000 fewer vehicles compared to last year, at 2.1 million vehicles during the quarter, as sales languished in Japan, other parts of Asia, and Europe. Vehicle sales were healthy in North America.

Toyota, the world’s top automaker for the last three years, was outpaced by Volkswagen AG of Germany in global vehicle sales for the first half of this year.

Toyota President Akio Toyoda has said the company is on track toward sustainable growth, after having survived the 2011 tsunami disaster in Japan that crimped production, as well as massive recalls, especially in the U.S.

The Japanese automaker left its profit forecast unchanged at 2.25 trillion yen ($18 billion) for the fiscal year through March 2016.

“Favorable foreign exchange rates and cost reduction efforts were main positive factors, while decreased vehicle sales and increases expenses to support initiatives for enhancing competitiveness were negative factors,” said Toyota Managing Officer Tetsuya Otake.

After the recalls surfaced, Toyota announced a halt to expansion such as new auto-assembly plants and instead focused on cost cuts, quality controls, personnel training and making more of existing plants. But that three-year hiatus was lifted earlier this year.