Toyota Motor, headquartered in Tokyo, announced a significant increase in second-quarter profit today. The company's earnings more than doubled, thanks to the favorable exchange rate of the yen and impressive sales figures. Consequently, Toyota is now revising its full-year forecast, increasing it by 50%. Specifically, the operating profit for the period between July and September rose by an impressive 155.6% compared to the same period last year, reaching a substantial amount of 1.44 trillion yen ($9.52 billion).
Toyota reported increased car sales in all global regions, including the United States, Asia, and its home market, over the six-month period ending in September compared to the previous year. As a result, the Japanese automaker has raised its full-year profit forecast to 4.5 trillion yen from 3 trillion yen. The primary reason for this revised projection is the favorable impact of foreign exchange rates, with the weaker yen contributing to around 1.18 trillion yen of the profit increase.
A boost is expected from cost reduction, marketing efforts, and price revisions, particularly outside of Japan, which is likely to offset the anticipated increase in expenses. The new projection differs from the analysts' average forecast of 4.0 trillion yen.
The quarterly results exceeded the average profit estimate of 1.08 trillion yen in a poll of 10 analysts conducted by LSEG. In comparison to the same period last year, the profit of 562.8 billion yen was also surpassed. As a result, Toyota shares witnessed a 4.4% increase before the release of the earnings, followed by a subsequent jump and reaching a 5.6% increase at a price of 2,735 yen.
Toyota announced a significant overhaul of its battery-powered vehicle plan in June, focusing on enhancing the driving range and reducing costs of electric vehicles. Recently, the company revealed its decision to increase investment by $8 billion in a North Carolina plant, which will produce batteries for hybrids, plug-in hybrids, and full-battery vehicles.
During the first nine months of the year, approximately 7.5 million cars were sold by Toyota, including the Lexus luxury brand. Nearly one-third of these sales consisted of hybrids. Additionally, around 76,000 battery electric vehicles (EVs) were sold, accounting for approximately 1% of total sales during the same period. Although Toyota has managed to avoid the negative impact experienced by other Japanese automakers like Nissan Motor and Honda Motor in China due to the shift towards EVs and the emergence of domestic brands, the company continues to face pressure in the largest automotive market globally.
It also faces a battle in Southeast Asian markets such as Thailand due to rising Chinese investments, fueled by higher demand for EVs.
