| Toyota Motor senior managing director Takeshi Suzuki in Tokyo on Friday. (AFP)
Tokyo, Nov. 4 (Reuters): Toyota Motor Corp has posted a 3.2 per cent fall in quarterly operating profit on Friday as it spent more money to expand capacity, but painted a rosier picture ahead fuelled by a weaker yen and beefier sales than anticipated.
Japan's top auto maker does not provide group-based profit forecasts but said it aimed to exceed last year's record as long as the dollar averaged 110 yen for the year to March ' a conservative assumption given the US currency is now fetching more than 117 yen.
The profit growth would come in spite of an upward revision to its capital expenditures for the year to 1.4 trillion yen from 1.25 trillion yen and bigger research and development costs than it predicted at the start of the year.
“Our reading on consumers’ demand for our cars turned out to be conservative,” senior managing director Takeshi Suzuki told a news conference, explaining the unexpected rise in spending to boost production capacity.
“Given the high levels of spending on facilities and R&D, we think the results were pretty good.”
Already the world’s most valuable car-maker worth $165 billion, Toyota is quickly closing in on General Motors Corp as the world's biggest car maker by volume. It aims to grab 15 per cent of the global market during the next decade.
Shaky demand in the all-important US market presents some worries, but analysts expect Toyota to weather the storm thanks to the imminent introduction of new cars, including revamped versions of the high-volume Camry and Corolla.
Toyota's operating profit for the second quarter ended September 30 totalled 404.3 billion yen, falling short of an average estimate of 413.63 billion in a survey of six brokers by Reuters Estimates.
Net profit rose 2.1 per cent to 303.7 billion yen while revenue climbed 10.1 per cent to 4.97 trillion yen.
"Things are basically good for Toyota," said Christopher Richter, analyst at CLSA Asia-Pacific Markets.
"Some people might make a big deal out of the capex expansion, but Toyota has a good track record of turning investment into value."
Toyota's Suzuki said the 1.4 trillion yen in spending allocated for this year was abnormally high, and that annual outlays would not exceed that level by much over the next few years.