Japanese car maker Toyota Motor has reported a 28% slide in net profits for its first financial quarter to the end of June. A weak US economy, a stronger yen and rising costs put the brakes on its recent rapid growth.
Toyota, in a close race with General Motors for the title of the world's top car maker, did not deliver the profit warning that markets had feared, but kept its forecast for the first decline in annual earnings in nine years.
Net profit came to just under 354 billion yen ($3.2 billion), dropping for a second straight quarter. Revenue fell by almost 5%.
Toyota executive vice president Mitsuo Kinoshita described the results as 'severe', blaming a rapidly changing business environment including a weak US dollar and soaring raw material prices.
He said it would be tough to achieve its goal of selling 10.4 million vehicles in 2009, saying the target was now under review. Toyota recently cut its global sales target for 2008 to 9.5 million vehicles from 9.85 million.
Toyota sold 2.19 million vehicles in its first quarter, an increase of 1.1% from a year earlier, helped by strong demand in markets such as Russia, Australia and the Middle East. Sales declined in North America and Europe.
Toyota is now stepping up its focus on emerging markets such as China, India, Russia and Brazil to offset weakness in developed markets, while shifting production in the US towards smaller cars and hybrid vehicles.
