Toyota profits in steep decline

Car making giant Toyota has announced a slump in first-quarter profits of 28%, heralding a full-year profit drop for the first time in seven years.

Problems from weakening markets in the US and Europe have hit the Japanese group hard, compounded by a strong yen and the rising cost of materials, it said.

"The financial results for this quarter were severe, due to our rapidly changing business environment, including exchange rates fluctuation such as the rise of the yen against the US dollar and soaring raw material prices," said Toyota's executive vice president, Mitsuo Kinoshita.

The number of sales in North America has fallen by 33,000 over the past year, while in Europe the drop was 32,000. In Japan car sales fell by 12,000, although the figure for Asia as a whole, excluding Japan, was 40,000 units.

The quarter from April to June this year saw Toyota record net profits of £1.67 billion, compared with a record £2.33 billion in the same period the year before.

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