* Raises full-year net profit forecast 13 pct
* Second-quarter net profit rises 70 pct to 438.4 bln yen
* Raises North American 2013/14 car sales forecast
* Gain in quarterly net profit outperforms big Japan rivals
By Yoko Kubota
TOKYO, Nov 6 (Reuters) - Toyota Motor Corp is closing in on a record profit set before the Lehman crisis after topping up its annual net profit forecast by nearly $2 billion and outperforming Japanese rivals as its expansion plans bear fruit.
The world's best-selling carmaker is racking up strong sales in a healthy U.S. market while keeping costs in check and taking a breather from building new facilities, in contrast to Nissan Motor Co and Honda Motor Co which are grappling with heavy expansion costs.
Toyota, one of the most export-reliant Japanese carmakers, is also reaping the benefits of a weakening yen that has boosted its profit margins but acknowledged it will have to start spending more to maintain its advantage.
"Our basic stance of controlling fixed costs and improving gross profit will not change, but we do need aggressive investment in order to brush up on future technology," Managing Officer Takuo Sasaki told an earnings briefing on Wednesday.
Toyota credited its conservative strategy as a key factor when it raised its net profit forecast by 190 billion yen to 1.67 trillion yen ($16.95 billion) for the year ending in March 2014, just short of its record 1.72 trillion yen from six years ago.
A Thomson Reuters I/B/E/S survey of 23 analysts gave an average forecast of 1.79 trillion yen. Toyota's annual operating profit rises by 40 billion yen for every one-yen rise in the value of the dollar.
Toyota, which went through a rapid expansion before booking huge losses in the year ended March 2009, now appears to be in the sweet spot of industry and currency market trends, and is reaping the rewards of it own investments in production.
But some analysts warned against complacency.
"There are clearly risks of Toyota starting to lag in growth pace to its peers," said Takaki Nakanishi, an auto industry analyst and CEO of Nakanishi Research Institute in Tokyo.
"If the decisions (on future expansion) are too slow, that may cause slower growth and that could make Toyota's earnings grow slower than its competitors."
Market participants also worried that the company might be too stingy with its cash.
"Toyota is representative of Japanese companies and even though it is generating so much profit its dividend yield of 2 percent is not enough," said BNP Paribas Securities chief Japan equity strategist Shun Maruyama.
For the July-September quarter, Toyota said net profit rose 70 percent to 438.4 billion yen, in line with the average estimate of 441.01 billion yen in a Thomson Reuters I/B/E/S survey of six analysts and outpacing Japan's second-biggest carmaker Nissan and No.3 Honda Motor Co.
Last week, Nissan posted a meagre 2 percent quarterly net profit growth while Honda booked a 46 percent rise.
Nissan is aiming to raise its global market share to 8 percent from last year's 6.2 percent and has been scrambling to build capacity worldwide. It is constructing eight new plants and expanding a factory in Russia.
Nissan plans capital expenditure equal to about 5 percent of revenue this financial year, compared with Toyota's 4 percent. On Wednesday, Toyota slightly raised its annual capital expenditure outlook by 2 percent to 940 billion yen.
To ease the burden of its expansion, Nissan and its partner Renault SA unveiled a potentially wide-ranging operating alliance this week with Mitsubishi Motors Corp .
Nissan's quick but messy expansion has left it underperforming Toyota in the United States after running into product launch troubles and quality issues.
In July-September, Toyota's U.S. sales grew 12.2 percent year-on-year compared to Nissan's 9.6 percent rise. Industry-wide sales grew about 9 percent year-on-year during that period.
Toyota on Wednesday nudged up its North America sales forecast to 2.63 million vehicles from 2.61 million, helping to offset a drop in its Asia sales forecast to 1.64 million from 1.7 million.
Toyota's shares ended 0.5 percent higher, compared with a 0.8 percent rise for Tokyo's benchmark Nikkei average.
For the year to date, Toyota's shares are up nearly 60 percent, outpacing a 9 percent rise for Nissan, which was hit hard this week after cutting its full-year profit forecast on Friday, and Honda's 25 percent rise.
Toyota sold the most cars among automakers worldwide in January-September, beating General Motors Co and Volkswagen AG.