(May 11, 2010) Toyota has forecast that profit will rise 48 percent this fiscal year as auto demand recovers in North America, its largest market.

The company may boost net income to 310 billion yen ($3.35 billion) in the year ending in March, from 209 billion yen a year earlier, the automaker said in a statement Monday.

The company's U.S. sales rose 24 percent in April as incentives boosted demand for its Corolla and Prius models and offset the impact of recalls of more than 8 million vehicles worldwide for defects related to unintended acceleration.

Toyota's North American sales may increase 2 percent this fiscal year to 2.13 million vehicles, the company said in the statement, as the world's second-largest auto market after China recovers from a recession.

“North America is the only market that matters” for Toyota's earnings this year, said Gentoku Kiyokawa, a fund manager in Tokyo at Fortis Investments, which bought Toyota shares in February. “Based on the recent sales numbers, the recalls aren't posing a problem.”

Toyota's U.S. sales dropped 20 percent in 2009, as industrywide sales slumped 21 percent to 10.4 million units, the lowest level since 1982. The company's sales in the U.S. surged 41 percent in March, after the company introduced discounts across its lineup.No-interest loans on seven models, discounted leases on 10 others and two years of no-cost maintenance for all new vehicles will be extended through the end of May, the company said last week.