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Business

Toyota annual profit races to new record

Capitalizing on a weak yen, strong demand in the US and a cost-cutting drive, Toyota's net profit has accelerated for the second straight year, setting a new annual record for the world's top-selling carmaker.

Japanese carmaker Toyota announced Friday its annual profit surged 19 percent to a record 2.17 trillion yen (16.1 billion euros, $18.1 billion), driving past last year's record of 1.82 trillion yen.

Releasing results for its fiscal year 2014/15, ending March, the world's biggest auto maker said that revenues had risen 6 percent to 27.2 trillion yen, with operating profit climbing 20 percent. Total vehicle sales, however, fell slightly to 8.97 million units.

Toyota President Akio Toyoda attributed the surge in operating profit to "favorable foreign exchange rates and cost reduction efforts," which had offset decreased vehicle sales and increased expenses due to higher investments.

New plants

For the current fiscal year, Toyota said it was expecting an even bigger net profit of about 2.25 trillion yen.

Moreover, it announced the construction of a new plant in Mexico, worth $1 billion, and another production line in China.

The plans end a construction freeze of several years, in which the carmaker was focusing on productivity gains and capacity utilization, amid global oversupply and weak demand for cars.

They come as Toyota saw rising sales especially in North America and Europe last year, despite sluggish Asian markets, with a significant downturn in Japan due to a hike in the country's sales tax.

uhe/el (Reuters, dpa, AFP)

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