© Reuters. The Toyota logo is seen on the bonnet of a newly launched Camry Hybrid electric vehicle at a hotel in New Delhi

TOKYO (Reuters) – Toyota Motor Corp’s quarterly operating profit edged up as continued increase in sales in Asia, including China, offset lower sales in North America, its biggest market.

Japan’s largest automaker lowered its full-year net profit forecast to 1.87 trillion yen ($17 billion) from a previous view of 2.3 trillion yen, citing unrealized losses on some of its equity investments, but reiterated its annual operating profit projection of 2.4 trillion yen.

For the October-December quarter, Toyota posted an operating profit of 676.1 billion yen, up 0.4 percent from 673.64 billion yen in the same period a year earlier. This missed an average estimate of 680.84 billion from 10 analysts polled by Refinitiv.

Its global retail sales rose 2.8 percent to 2.71 million units in the quarter from 2.63 million units a year earlier, driven by a climb in sales to 464,000 units in Asia including China, from 404,000 during the same period last year.

Sales in North America, which accounts for nearly 30 percent of Toyota’s annual vehicle sales, came in at 680,000 during the quarter, from 735,000 a year before. Overall demand for cars in the region has stagnated over the past two years.

China, however, has been a bright spot for Toyota, partly due to strong demand for its Lexus luxury brand that has helped it buck a wider slowdown in the world’s biggest auto market.

The Japanese automaker sold 1.47 million vehicles in China in 2018, up 14 percent on year. Toyota has said it aims to lift sales to 1.6 million in 2019 in the country, even as it and other automakers brace for another tough year.

Auto sales in China last year contracted for the first time since the 1990s, hurt by the phasing out of purchase tax cuts on smaller cars and the Sino-U.S. trade war. The world’s second-largest economy grew at its slowest in almost three decades in 2018, and the pace is expected to weaken further this year.

For now, lower tariffs on cars made in Japan are helping buffet many of its automakers from the slowdown in China, even as rivals such as Ford Motor (NYSE:) continue to post losses there amid China’s blistering trade war with the United States.

Warming political ties between Japan and China are also helping Japanese automakers. Last year China and Japan pledged to forge closer ties as they look to deepen their relationship which in the past has hit rocky patches, prompting boycotts of Japanese products including autos.

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2019-02-05