(Adds president comment, details from news conference)
By Chang-Ran Kim
TOKYO, Oct 25 (Reuters) - Daihatsu Motor Co, Japan's second-largest minivehicle maker, reported on Friday a 76 percent year-on-year fall in half-year group net profit as sales slid in its increasingly competitive corner of the market.
Daihatsu, a unit of Toyota Motor Corp , posted a net profit of 1.29 billion yen ($10.35 million) for April-September as sales dropped 4.2 percent to 455.70 billion yen.
The result was below the company's forecast in May for a net profit of 1.5 billion yen but the fall was expected after it cut first-half parent sales and profit estimates earlier this month.
First-half dividend was slashed to 2.5 yen from three yen last year.
Daihatsu also cut its group net profit forecast for the full year to 6.5 billion yen from its May forecast of eight billion yen.
"Competition will heat up in an increasingly crowded market," President Takaya Yamada told a news conference. "We will aim to raise our market share in the second half with our new models."
The results are in sharp contrast to those of Nissan Motor Co -- which kicked off automakers' first-half earnings with a surprising 83 percent rise in operating profit -- and underscores the divide between local and global automakers.
While Japan's top automakers are expecting another bumper year this term, the surge in profits is mainly due to brisk sales in their most important North American market, with demand at home stagnant at best.
Daihatsu makes less than a third of its revenues overseas, while the top five automakers garner 80 percent of their revenues in North America alone.
MARKET SHARE FALLS
Daihatsu attributed the fall in first-half profits to a sharp drop in sales of minivehicles made for Toyota. Some support, however, came from healthy sales at its Malaysian subsidiary Perodua, which is now included in consolidated accounts.
Daihatsu said sales would get a lift in the current half year from the re-engineered "Move", launched this month.
But given the weak first-half performance, Daihatsu said sales for the full year would be worse than previously expected, and cut its forecast to 950 billion yen from 970 billion projected in May.
Sales of minivehicles, which have a maximum engine displacement of 660cc, have held up well in the face of slumping demand for regular cars, thanks partly to tax breaks and looser restrictions on parking in rural areas.
But Daihatsu saw its market share slip to 25.4 percent in the first half from 27.9 in 2001, partly due to Nissan's entry into the niche in April.
For the full year, it expects to grab 26.9 percent of a market it estimates at 1.85 million vehicles.
In the first nine months of 2002, sales of Daihatsu's minivehicles in Japan fell 6.3 percent from the year before, while the overall minivehicle market has roughly stayed flat.
Daihatsu's shares ended up 0.75 percent at 402 yen, while the Nikkei average closed up 1.30 percent. ($1=124.63 yen)