With the exception of Toyota, most Japanese car makers are expected to report a rise in July-September operating profit helped by a sales expansion overseas.

But the profit gains are likely to fall far short of rises in revenues as bigger spending on research and development and higher materials prices, especially oil-based products such as plastics and resins, add to operating costs, analysts told the Reuters news agency.

“We expect a similar story at all three of the major auto makers – strong revenue growth that does not translate at the operating profit line,” Macquarie Securities analyst Kurt Sanger wrote in a recent report, referring to Toyota, Nissan Motor and Honda.

A consensus estimate of six brokerages by Reuters Estimates put second-quarter operating profit at Toyota at 413.63 billion yen ($US3.57 billion), down 0.9% from the year before.

Reuters said the Asahi Shimbun newspaper reported at the weekend that Toyota’s April-September operating profit was estimated to have fallen around 7% from a year ago to 800 billion yen, roughly in line with consensus estimates.

The expected profit decline was notwithstanding a rise in group-wide sales to about 4 million units, up 500,000 units from a year ago, and record high revenues of nearly 10 trillion yen, the Asahi reportedly said.

Reuters said Toyota in particular is feeling the pinch on its margins from rising start-up costs for new factories to meet rapid growth in demand worldwide, but the second business half-year should offer a smoother ride for Japan’s top auto maker, analysts reportedly said, as new cars come to market in the United States, where Toyota’s product mix had worsened on strong sales of low-margin hybrids and small cars.

Reuters added that data on Monday showed a solid rise in worldwide production at the top three brands during the six months to September – output climbed 9.4% at Toyota, 9.3% at Nissan and 8.0% at Honda.