Dive Brief:
- Toyota Motor Corp. posted a year-over-year operating profit decline of nearly 28% in Q3, its second consecutive quarterly decline in over two years, according to its earnings report Feb. 4.
- For the first nine months of 2024, the automaker reported a 14.1% decline in operating income as the company navigates a challenging market.
- Toyota also cited investments in new growth areas, R&D expenses, labor costs, marketing activities and production halts in Japan for the drop in profits.
Dive Insight:
Toyota’s operating income for the nine months ended Dec. 31, 2024 was 3.8 trillion yen ($24.2 billion). It represents a YoY decline of 560.7 billion yen ($3.7 billion).
In North America, the automaker’s operating income for the first nine months decreased by 348.2 billion yen ($2.2 billion) to 204.2 billion yen ($1.3 billion), a decline of 63%. Toyota also reported a 345 billion yen ($2.8 billion) decline in operating income in its home market of Japan during the first nine months of FY2025.
Toyota reported global consolidated vehicle sales of 7 million units for the first nine months of FY2025, down roughly 4% YoY.
In the North American market, Toyota reported sales of 2,043,000 vehicles during the period, a decline of 118,000 units. Toyota also reported that its proportion of electrified vehicle sales was 45.3% of its sales volume, mainly due to the strong performance of hybrid vehicles in North America, Europe and other regions.
Despite the dip in volume, sales revenue in the period rose by 4.8% to $10.8 billion. Toyota says it was able to achieve a high level of profit due production recovery in Japan and other improvement efforts it made in the first half of the period.
The automaker forecasts that its full-year consolidated vehicles sales will reach 9.4 million units. Revenue is expected to reach 4,700 billion yen ($309.2 billion), which is 400 billion yen ($2.6 billion) higher than its previous forecast. Operating income is forecast to reach $30.9 billion for the fiscal year ending March 31, which represents roughly a 10% margin if Toyota achieves its goal.
Toyota said its full-year forecast was revised based on improvement efforts in the first half of the year, including product competitiveness and value chain earnings, according to its financial report.
