TOKYO – Toyota on Nov 5 booked its first profit gain in six quarters and lifted its annual outlook by 15%, as robust demand for higher-margin hybrid vehicles and a weaker yen offset a slide in sales in China and the Middle East.
The results, along with plans to return up to US$89 billion (S$113.64 billion) to shareholders over five years, helped send Toyota’s shares soaring in Tokyo trade.
The world’s largest carmaker has benefited from its focus on petrol-electric hybrids, even as it faces considerable headwinds in the form of competition from Chinese electric vehicle makers and surging fuel prices in the wake of the Iran war.
Toyota said it now expects operating profit of 3.9 trillion yen (S$31.48 billion) for the year ending March after posting a forecast-beating 34% climb in income for the July-September quarter.
Unlike other traditional car companies that went all-in on electric vehicles and then had to write down billions of dollars in investment when demand for EVs weakened, Toyota has primarily focused on advancing the hybrid technology it popularised with the Prius decades ago.
The strategy has been key to its ability to defend market share in its main market, the United States, despite the threat from fast-moving Chinese EV makers elsewhere.
Toyota increased a planned share buyback to 1.3 trillion yen from up to 1 trillion yen and said it would spend up to 14 trillion yen on returning money to shareholders by March 2031.
Shares in Toyota had gained around 8% before the results as investors sold AI-related stocks and bought blue chips after the US midterm elections. They then extended gains to finish up more than 16% in afternoon trade, their biggest one-day gain since 1987.
While higher fuel prices were hitting consumer sentiment in the highly competitive Chinese market, Toyota was now fighting back, Chief Financial Officer Yoichi Miyazaki told a briefing.
“We’ve been able to halt the decline in our market share and are now starting to regain some ground,” he said.
China, increasingly, is setting the pace for the rest of the auto industry in everything from production and design to software and robotics
Toyota also said it would establish a robotics business of its own that would provide robots for manufacturers and other industries, and position the business as a pillar of future growth.
Operating profit for the July-September quarter came in at 1.13 trillion yen, above a median forecast of 992 billion yen in a poll of nine analysts surveyed by LSEG.
Takanori Azuma, Toyota’s chief accounting officer, said the company was offsetting the impact of the situation in the Middle East and a surge in material prices through sales efforts and cost reductions. REUTERS
