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Last Updated: Wednesday, 7 November 2007, 08:30 GMT
Toyota boosted by overseas sales
A Toyota Prius
Sales of Toyota's hybrid cars have been helped by rising petrol prices
Toyota has reported strong profits despite stagnant sales in Japan.

Net profit grew 11% in the three months to the end of September to 450.9bn yen ($4.0bn; 1.9bn).

High petrol prices have increased demand for Toyota's hybrid cars such as the Prius and also for small cars such as the Camry.

Sales in North America, Europe, emerging markets and the rest of Asia were strong, making up for stubbornly stagnant sales in Japan.

Some analysts are worried that Toyota's exposure to the US market could be a problem given the state of the US economy.

"In the United States, sub-prime problems could negatively impact auto loans," said Takeshi Osawa from Norinchukin Zenkyoren Asset Management.

"If that happens, even competitive Japanese cars may need more incentives," he added.

Toyota also announced it would buy back up to 110bn yen ($966m; 461m) worth of shares this month.

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