Toyota Motor Corp. reported a sharp rise in profit for the first quarter of its fiscal year, helped by strong vehicle sales in the US and India and a weaker Japanese yen that increased the value of its overseas earnings.
The Japanese automaker, known for models including the Prius hybrid and Lexus luxury vehicles, posted a net profit of 1.48 trillion yen ($9.4 billion) for April-June, up from 841 billion yen in the same period a year earlier.
Quarterly sales increased 10 percent year-on-year to 13.5 trillion yen ($85 billion).
A weaker yen benefits major Japanese exporters such as Toyota because overseas earnings become more valuable when converted into yen. The US dollar averaged about 145 yen during the first quarter of fiscal 2025, compared with around 160 yen during the same period this year.
The exchange rate contributed 345 billion yen ($2.2 billion) to Toyota's operating profit during the April-June quarter.
Toyota is using an exchange rate of 160 yen to the dollar for its full-year earnings forecast.
Chief Officer Takanori Azuma said Toyota sold 2.39 million vehicles worldwide during the quarter, slightly down from 2.41 million a year earlier.
However, the company expects global sales to rise to 9.7 million vehicles for the full fiscal year, compared with 9.595 million in the previous year.
Azuma said demand for Toyota's hybrid vehicles remains strong in several major markets, including the US, where sales of the Camry sedan and RAV4 sport utility vehicle have been solid.
Toyota plans to increase production of hybrid vehicles and hybrid batteries through 2030 while working to reduce costs, Azuma said. Sales of its electric vehicles are also performing well, he added.
In India, the Urban Cruiser and Innova Hycross were among the company's popular models, while the Yaris continued to sell strongly in Thailand and Europe.
Political instability in the Middle East has created additional challenges for Japanese automakers because they depend heavily on shipping routes through the Strait of Hormuz, which has effectively been closed. Toyota said it is working to deal with the disruption, including by looking for alternative shipping routes.
The company also faces production challenges following a magnitude 7.1 earthquake that struck Kumamoto in southwestern Japan on July 28.
Toyota has production facilities in the area. Its Tahara plant has halted production for five days through Friday. The shutdown will then be followed by a scheduled summer break, meaning production will remain suspended until the end of August.
For the full fiscal year ending March 2027, Toyota expects a net profit of 3.25 trillion yen ($20.6 billion), down from a record 3.85 trillion yen ($24 billion) in the previous fiscal year.
Annual sales are projected at 54 trillion yen ($342 billion), up from 50.7 trillion yen in the fiscal year that ended in March.
Toyota shares fell nearly 2 percent in Tokyo trading after the earnings announcement.