A number of factors have prompted Toyota to raise its profit forecast

A number of factors have prompted Toyota to raise its profit forecast

Toyota has raised its profit forecast for the financial year by more than 12% to JPY2 trillion (US$17.5bn) from an earlier forecast of JPY1.78 trillion thanks to a weaker yen – which is close to a seven-year low - and cost-cutting efforts.

It is also raising its sales forecast for its key North America market. Sales in Europe are also up, offsetting a decline in Asia.

Toyota's executive vice president, Nobuyori Kodaira, said the automaker had also raised its forecasts for operating profit and revenue for the period. "We are revising our operating income forecast upwards by JPY200bn to JPY2.5 trillion," he said.

He said this reflected the progress made on marketing and in reducing costs, and also the change in foreign exchange rates.

For the July to September quarter, Toyota’s net profit rose to JPY539.1bn from JPY438.4bn in the same period a year earlier. Its quarterly revenue grew to JPY6.55trn from JPY6.28trn a year earlier.

In the US, sales rose 7% in October to 180,580 and Toyota's market share for the year has been steady at 5.8%. It raised its sales forecast for North America to 2.74m vehicles from 2.71m.

Toyota has retained its lead over Volkswagen and General Motors as the world’s best-selling carmaker with record January-September sales of 7.615m vehicles, up nearly 3% from the previous year. That compared with 7.4m sales for Volkswagen and 7.37m for GM.

The positive forecast comes despite a global recall of 1.75m over faulty brake installations and fuel component issues; Toyota is also one of several carmakers involved in a recall over faulty airbags made by Japanese supplier Takata.