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Toyota outshines lackluster market to report record net profit

Automaker keeps outlook unchanged as it announces 200bn yen share buyback

Japan's largest automaker managed to push aside the hit it took from the strengthening yen to increase its net profit by 3%.   © Reuters

TOKYO -- Toyota Motor on Thursday reported a 3% increase in net profit to a record 1.27 trillion yen ($11.7 billion) for the first half through September as successive launches of new models paid off in a lackluster global market. 

Sales grew 4% to 15.28 trillion yen, as global unit sales increased 3% to 5.45 million. Operating profit jumped 11% to 1.4 trillion yen.

Toyota has released a remodeled RAV4 SUV and a revamped Corolla since April under a plan to "update cars that account for 60% of global sales" by 2021. Going forward, it is set to release more updates, including a new Yaris.

Retooled marketing efforts in the Chinese and North American markets also have borne fruit.

The Japanese automaker's 6% share in China pales in comparison with its global share of 10%. To address this, Toyota is participating in more motor shows in regional cities and stepping up marketing of hybrids. Owing to these efforts, Chinese sales rose 10% despite an overall market decline for the first half.

Profitability is also improving in North America. In addition to the launch of new models, the automaker increased the supply of pickup trucks, popular among consumers there, which helped reduced spending on sales incentives. A stable used-car market has helped sustained the value of leased vehicles.

The yen's appreciation reduced profit by 90 billion yen, but the effect was more than offset by cost cuts worth 60 billion yen and a sales gain of 185 billion yen.

Toyota kept its net profit estimate for the full year through March at 2.15 trillion yen, up 14%.

The automaker separately announced a plan to buy back 34 million shares, or 1.19% of the all outstanding shares, for 200 billion yen.

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