TOYOTA Motor Corp has become the world's most profitable carmaker through quality, not quantity, as it churns out well-made and well-priced cars with excellent fuel economy, says its president.

Even though General Motors still has a slim lead in terms of vehicle production, the ailing US carmaker is hardly a match for the Japanese company when it comes to the bottom line. In its previous fiscal year, Toyota posted record net revenue and net income. The former rose 13.8 per cent to 23.94 trillion yen and the latter 19.8 per cent to 1.64 trillion yen. Consolidated vehicle sales for the year were 8.52 million units, an increase of 550,000 from the year before.

Toyota projects consolidated vehicle sales for its fiscal year ending March 31, 2008 will be 8.93 million units, up from an initial forecast of 8.89 million.

Sitting pretty: Mr Watanabe in the Toyota i-Real personal mobility vehicle concept at the recent Tokyo Motor Show

With such an impeccable record, it was perhaps a little rude to have asked Toyota president Katsuaki Watanabe how he felt about remarks that Toyota makes good but not great cars, which ar,e often described as boring rather than exciting. But the affable company head merely smiled and asked through his interpreter: 'We had many exciting cars at the Tokyo Motor Show. You don't agree?'

Mr Watanabe was speaking in Tokyo a day after the opening of the 40th Tokyo Motor Show recently. Toyota is 'committed to making a whole line-up of models, including exciting models', he said. 'We will be producing sports cars as well.'

Toyota aspires to produce quality, not quantity, he explained. The company has previously said it aimed to become No 1 in the world in terms of the quality of its products and services by pursuing a thorough approach, and that it hopes to produce vehicles that emotionally appeal to buyers.

At luxury division Lexus, for example, engineers are said to closely study each manufacturing process for each new model to ensure the car is of the highest quality in terms of reliability and driver satisfaction. This is because the company believes driver satisfaction includes the ease of operation in the cabin, comfort, luxury, refinement and performance.

Mr Watanabe said: 'We are No 1 in quality. And I believe the hybrid technology is No 1 in the world. We can take pride in it.'

Toyota unveiled the world's first mass-produced petrol-electric hybrid passenger car in 1997. And in May this year it announced that it had sold a cumulative total of one million hybrids, making it the most successful manufacturer of this environmentally friendly technology.