TOKYO: On Wednesday, Toyota Motor announced a substantial surge in its second-quarter profits, attributed to a weakening yen and robust sales. As a result, the company has raised its full-year forecast by 50%.
The world’s leading automaker disclosed that its operating profit for the three months ending in September had skyrocketed by 155.6% compared to the previous year, reaching a total of 1.44 trillion yen ($9.52 billion).
Toyota reported increased sales across all global regions, including the United States, Asia, and its domestic market, during the six months ending in September, compared to the same period the previous year.
The company revised its full-year profit forecast to 4.5 trillion yen, up from the previous 3 trillion yen projection, primarily due to favourable foreign exchange rate effects. The weakening yen alone is expected to contribute 1.18 trillion yen to the improved full-year profit outlook. Toyota anticipates that this positive trend, combined with cost reductions, marketing initiatives, and price adjustments, particularly outside of Japan, will offset anticipated higher expenses.
This updated projection surpasses the average forecast of 4.0 trillion yen by analysts.
In a poll of 10 analysts conducted by LSEG, the quarterly results exceeded the average profit estimate of 1.08 trillion yen. This represents a notable increase compared to the 562.8 billion yen profit reported during the same period the previous year.
Following the earnings announcement, Toyota’s shares, which had already climbed by 4.4%, surged further to 5.6%, reaching 2,735 yen by 0516 GMT.
In June, Toyota unveiled a comprehensive overhaul of its electric vehicle strategy, committing to technologies aimed at enhancing driving range and reducing EV production costs. Recently, the company announced an $8 billion boost in investment for a North Carolina plant, intended for the production of batteries for hybrid, plug-in hybrid, and fully electric vehicles.
During the first nine months of the year, Toyota sold 7.5 million vehicles, including those under the Lexus luxury brand, with nearly one-third of them being hybrids. Battery electric vehicles (EVs) accounted for around 76,000 units, constituting approximately 1% of the total sales during the same period.
While Toyota has managed to evade the challenges faced by other Japanese automakers, such as Nissan and Honda, in the Chinese EV market and the emergence of domestic brands, it still contends with competitive pressures in the world’s largest automobile market. Furthermore, Toyota faces intense competition in Southeast Asian markets, like Thailand, driven by increased Chinese investments and growing demand for EVs.
