Toyota on Thursday reported a half-year jump in profits even as car sales declined in most regions, as it moves to cut costs and squeeze more productivity out of its plants worldwide. The world's top automaker said its net profit rose nearly 12 percent to 1.258 trillion yen ($10.35 billion) in the fiscal first half through September, with a weak yen also helping boost the bottom line.
The Corolla sedan and Prius hybrid maker's revenue for the period rose almost 9 percent from a year ago to 14.09 trillion yen.
Toyota, however, sold slightly fewer cars globally at 4.98 million units, and trimmed its full fiscal year sales target.
North America stood out as the one key region where demand was strong, after rivals Honda and Nissan also cited the giant market as a bright spot that helped offset a sluggish Japanese market. Japanese automakers have benefited from healthy growth seen in the U.S. market with low interest rates, although the Federal Reserve's plans to raise rates, possibly next month, could dent consumers' appetite for new cars. Meanwhile, the weaker yen has made them relatively more competitive overseas and inflated the value of repatriated overseas profits. Sales have been sluggish in their home market, however, after a sales tax rise last year dented consumer spending and as younger urban residents delayed buying a vehicle.
"The steady performance in North America is offsetting stagnant sales in emerging economies in Asia, especially Indonesia and Thailand," said Yasuo Imanaka, analyst at Rakuten Securities. "The weak yen is also helping Toyota and other Japanese automakers generate profits." Toyota is locked in a neck-and-neck race with crisis-hit Volkswagen to again claim the title of the world's biggest automaker - a crown it has held for several years. The Japanese firm took a slight lead in the first nine months of 2015, as its German rival battles a huge emissions cheating scandal. "Volkswagen is in a serious situation - Japanese automakers can take advantage of the slump by trying to win VW customers," Imanaka said. Toyota has been focusing on squeezing out productivity gains and better using existing plants - it put on hold building new factories for several years.
The company began operating a new Thai plant in 2013, but then halted investment as the global car market struggled with oversupply and weak demand. In April the company announced it was ending the construction freeze as it unveiled plans for a $1.0 billion plant in Mexico, while it is overhauling its operations in China, the world's biggest vehicle market. The company is also overhauling its production methods, vowing to slash development costs to try to offset any downturn in the market.