Toyota continues to power ahead

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Toyota has continued to show solid growth on the back of the popularity of its models in the US and Europe, its quarterly profits rising 9%.

During January to March, when Toyota overtook GM as the world's largest carmaker in terms of volume, profits rose to $3.67bn (£1.84bn) from $3.37bn.

But Toyota was cautious in its future sales outlook, forecasting a modest 0.4% rise in profits during 2007-8.

Analysts said these forecasts reflected a slowdown in the US market.

'Satisfying customers'

Toyota has prospered in the US where its main rivals, GM and Ford, have floundered.

Its Camry model is the most popular in the US, while cars such as the hybrid Prius and the Lexus remain in demand in Europe.

There is plenty left for us to do Katsuaki Watanabe, Toyota

Toyota expects to sell 9.34 million units this year, whereas GM is forecasting annual sales of 9.2 million.

Toyota is maintaining its investment in new capacity despite generally tough conditions in the industry, with new plants planned in Russia, Mexico and Thailand.

Toyota said it was unconcerned by the comparison with GM, which has been the world's largest carmaker for decades.

"Rather than think about other companies, I feel that we must do our utmost to satisfy customers around the world," said Katsuaki Watanabe, the firm's president.

"There is plenty left for us to do."

Analysts said conditions were likely to get harder for Toyota this year, with the US market softening further and the yen likely to strengthen.

"The outlook for the year to March 2008 gives the impression of caution," said Kazuhiro Takahashi, from Daiwa Securities SMBC.

"It is a fact that the North American market is slowing down, so it is tough for analysts to be bullish."