Toyota Motor announced that its profits for the second quarter doubled, thanks to a weaker Japanese yen and strong sales. They also increased their full-year profit forecast by 50%.
In the three months ending in September, Toyota’s operating profit went up by 155.6% compared to the same period last year, reaching 1.44 trillion yen (which is about $9.52 billion).
Toyota managed to sell more cars in all regions worldwide, including the United States, Asia, and Japan, over the six months leading up to September, compared to the previous year.
The company now expects to make a full-year profit of 4.5 trillion yen, up from the earlier estimate of 3 trillion yen, mainly due to favorable foreign exchange rates. The weaker yen is expected to contribute 1.18 trillion yen to the increased profit.
Toyota anticipates that cost reductions, marketing efforts, and price adjustments, especially outside of Japan, will help offset higher expected expenses. This new profit projection is higher than what analysts had predicted, which was 4.0 trillion yen.
Toyota’s quarterly results exceeded the average estimate of 1.08 trillion yen profit from a poll of 10 analysts by LSEG, and it’s a significant improvement from the 562.8 billion yen profit in the same period last year.
Following the announcement of their earnings, Toyota’s shares went up by 5.6%, reaching 2,735 yen, after initially rising by 4.4%.
In June, Toyota revealed a comprehensive plan to enhance their battery-powered vehicle strategy, focusing on improving the range and reducing the cost of electric vehicles. They also announced an $8 billion investment in a North Carolina plant to produce batteries for hybrid, plug-in hybrid, and fully electric vehicles.
During the first nine months of the year, Toyota sold 7.5 million cars, including their luxury brand Lexus, with nearly a third of them being hybrids. Battery electric vehicles (EVs) made up only about 1% of their total sales, with around 76,000 units sold during the same period.
While Toyota has managed to avoid the challenges faced by other Japanese automakers like Nissan and Honda in the shift towards EVs in China, they still face pressure in the Chinese market. Additionally, they’re encountering competition in Southeast Asian markets like Thailand due to increased Chinese investments driven by rising demand for EVs.
In conclusion, Toyota had a great second quarter, with their profits more than doubling due to strong sales and a weaker yen. They also raised their full-year profit forecast by 50%. Toyota’s success is partly thanks to selling more cars in different parts of the world. They expect the favorable exchange rates to keep boosting their profits. Even though they face some challenges in the electric vehicle market, they are investing in this area for the future. Toyota’s performance is better than what experts expected, and their shares rose as a result.