Profits of Toyota, which is on course to become the world’s biggest carmaker this year, jumped 19 per cent in the final quarter of 2006.

The increase in the Japanese company’s operating profits to 574.8 billion yen (£2.4 billion) was fuelled by strong sales in North America and Europe and was flattered by the weak yen. The rise, of 7.3 per cent net, positions Toyota for its eighth successive increase in annual profits when its financial year closes in March.

Toyota’s profit jump in its third quarter is in sharp contrast with the recent performances of its main competitors. Last week Nissan reported a 23 per cent drop in profits for the final quarter of 2006. Last month Ford declared its worst annual loss, of $12.7 billion (£6.45 billion) and said that sales in its American heartland had suffered.

Toyota is expected to sell more cars than General Motors this year, pushing an American carmaker out of the world’s No 1 position for the first time. Last year Toyota sold more cars than DaimlerChrysler in the United States to become the third-biggest carmaker in the US.

Toyota, which has been selling cars to Americans for 50 years, has gained from a growing reputation for good-quality and environmentally friendly cars after the success of its Prius hybrid vehicle. In America, Toyota’s sales rose 16 per cent to 764,000, with new versions of the RAV4, the Camry and the Yaris leading the way. The company is looking at building a further factory in the US to meet demand, with Chattanooga, Tennessee, and Marion, Arkansas, tipped as the likeliest sites.

Toyota is expected to report operating profits of Y2.2 trillion and net profits of Y1.55 trillion for its year to March 31. The company left its forecast for its full year unchanged, despite its third-quarter increase.

The carmaker suffered a fall of 5 per cent in sales in its home market, although its share of the market, excluding mini vehicles, grew slightly and its income rose with increased exports. Toyota blamed weaker market conditions in Taiwan and Indonesia for a 6 per cent drop in sales in Asia.

The yen’s weakness added Y30 billion to Toyota’s operating profit. However, the group believes that the exchange rate is close to economic fundamentals, Takeshi Suzuki, the senior managing director, said.

The market welcomed the figures. Koji Endo, an analyst with Credit Suisse First Boston in Tokyo, said: “Toyota’s numbers are super-super-strong. To be honest, it’s hard to find anything bad at this point.”

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