It’s yet another set of Japanese automaker quarterly results announcement guaranteed to make embattled Detroit Big Three CFOs think of jumping overboard: today (Friday 4 August) it was Toyota’s turn to announce operating income up 26.5% to 512.4bn yen (helped by 100bn yen in favourable currency rates) and net income up 39.2% to 371.5bn yen for the first quarter of the fiscal year ended 30 June.


Consolidated net revenues for the first quarter rose 13.2% year on year to 5.64 trillion yen.


Operating income was boosted a total of 180.0bn yen by 100.0bn yen from the positive effects of exchange rates (the yen has weakened slightly against the dollar and euro in the last year), 60.0bn yen from marketing efforts and 20.0bn yen from cost reduction efforts, Toyota said. That was offset by “negative factors” – totalling 72.7bn yen – which included an increase in R&D expenses of 27.5bn yen, 15.4bn yen in depreciation and CAPEX, and 12.5bn yen in increased labour cost.


Presenting the results in Tokyo on Friday, TMC senior managing director Takeshi Suzuki said: “We posted substantial increases in both revenues and profits, achieving record levels. We believe this is a result of company-wide efforts to implement the plans that we set at the beginning of this fiscal year.”


Consolidated vehicle sales for the first quarter came to 2.09m units, an increase of 143,000 year on year.

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In Japan, unit sales decreased 7,000 units to 543,000 units though market share – excluding mini-vehicles – grew 1.5% to 46.5%. Operating income from Japanese operations increased by 104.6bn yen to 293.0bn yen, due mainly to higher Japanese production volume in response to strong overseas demand.


Sales in North America reached 747,000 units, an increase of 106,000 units due to the strong popularity of such models as the redesigned RAV4 the new Yaris (new to the market just as fuel prices soared) and FJ Cruiser SUV. In North America, operating income increased by 2.3bn yen, to 140.1bn yen, as a result of strong sales of these and other models, such as the redesigned Camry, which offset start-up costs at the Texas light truck plant which is scheduled to open soon.


In Europe, despite weak market conditions, unit sales increased by 52,000 units to 308,000 vehicles. Operating income from European operations increased 19.8bn yen to 36.5bn yen, as a result of strong sales primarily of redesigned models such as the Yaris, RAV4 and Lexus IS – the latter recently launched, at last, with a diesel option which widens its appeal on the continent. Profits in Europe have been improving steadily, Toyota noted.


Sales in Asia decreased 36,000 units to 193,000 units, mainly due to difficult markets in Indonesia (mainly government tax policy) and Taiwan. Operating income from Asian operations decreased 9.8bn yen, to 30.0bn yen, as a result of decreases in both production volume and the number of vehicle sold.


Exports of IMV vehicles from Asia, which began last year, have, however, been progressing well, Toyota said, without giving numbers.


In other regions including Africa, Oceania and South and Central America, sales increased to 300,000 vehicles, an increase of 28,000 units. But operating income in these regions decreased 1.1bn yen to 15.9bn yen.


TMC estimates that the projected consolidated vehicle sales for the fiscal year ending 31 March, 2007 will be 8.45m units, unchanged from initial projections announced last May. Consolidated revenues and earnings projections also remain unchanged, with consolidated net revenues of 22.3 trillion yen, operating income of 1.90 trillion yen and net income of 1.31 trillion yen.


Suzuki added: “We are currently on track overall for the annual plan so far, with the exception of foreign exchange rates assumptions. Despite fluctuations in raw material prices, we aim to [achieve] the outcome [we] forecast… at the beginning of this fiscal year.”