Car Giant Toyota Upgrades Profit Forecast

Toyota, the world's biggest car maker, has upgraded full-year profit expectations after an improved performance from operations in China – despite the slowdown affecting the world's second biggest economy.

The Japanese firm also lifted its sales forecast for the North American market, where demand has been booming.

Toyota said it expected to post a record net profit of 2.27trn yen (£13.4bn) for the year to March, slightly ahead of a previous forecast of 2.25trn yen (£13.3bn).

Its operating income in Asia is being boosted by increased production efficiency in China and favourable exchange rates in the region – lifting earnings even as economic weakness among some countries on the region has hit sales.

Managing officer Tetsuya Otake said: "Our Chinese operations have improved, which has increased our profitability.

"This is why we've raised our profit forecast."

However third quarter operating profits fell 5% compared to the previous year to 722bn yen (£4.3bn), below market expectations.

Toyota has been seeing solid growth in US sales as an improving economy and falling petrol prices boost demand for gas-guzzling SUVs and pick-up trucks – representing higher profit margins for the car maker.

It (Other OTC: ITGL - news) expects 2.87 million car sales in North America for the full year.

The Japanese firm sold 10.15 million vehicles across the globe last year, staying ahead of Volkswagen (Other OTC: VLKAF - news) as the world's top car maker as the German company's sales were hit by the diesel emissions cheating scandal.

Volkswagen on Friday said it was delaying the publication of full-year financial figures - which had been due on March 10 - in the wake of the scandal.

Elsewhere, Sweden's Volvo posted a 34% increase in annual adjusted operating profit to 4.57bn krona (£370m), but the figure missed analysts' expectations.

Volvo forecast a steeper than expected slowdown in the North American heavy-duty truck market.

Chief executive Martin Lundstedt also said it was struggling in China and Brazil.

The company has embarked on a cost-cutting programme targeted to reach 10bn krona (£820m) this year, which has seen 5,000 jobs cut across the group.