2023-11-01 13:20:40
The Japanese car manufacturer Toyota is heading for a record year. Buoyed by strong sales figures in the first half of the year and the weak local currency, the yen, the world’s largest car company raised its profit forecast for the fiscal year ending in March by 50 percent on Wednesday. Instead of 3 as before, he now expects 4.5 trillion yen, which corresponds to 28 billion euros. From June to September, Toyota earned the equivalent of around 9 billion euros. This is an increase of 155 percent compared to the same period last year and was well above the average operating profit expected by analysts.
Tim Canning
Correspondent for economics and politics in Japan based in Tokyo.
The good figures and an announced buyback of shares worth the equivalent of $660 million caused the price of Toyota shares on the Tokyo stock exchange to rise sharply. The buyback volume amounts to almost 0.5 percent of the outstanding shares. The share price rose in value by more than 5 percent, pulling up the entire Nikkei 225 benchmark index. The price has increased by 50 percent since the beginning of the year.
More cars sold than ever before
The company was able to benefit from increasing demand around the world after the corona pandemic subsided. Between April and September, Toyota sold 4.7 million cars from its core brand; that is 14 percent more than a year ago. Sales figures rose particularly in the home market of Japan; Here the group sold one million cars, which corresponded to an increase of 23 percent.
In Europe, sales figures rose by 11 percent to 557,000 vehicles, and sales in America also increased. Together with Lexus and other group brands, the company brought a record amount of 5.6 million vehicles to customers in the first half of the year, which means that the annual target of 11.4 million vehicles for the year as a whole appears within reach.
In China, where many traditional car companies have recently suffered significant losses in their sales, Toyota was able to keep its sales figures constant. Chief Financial Officer Yoichi Miyazaki said on Wednesday that the company was making progress with its plan to defend its market share in China. “Instead of being drawn into a price war, we want to expand our volumes.” Just a few weeks ago, an important Japanese competitor, Mitsubishi, announced that it would stop production in China.
Weakness in electric cars
However, Toyota had to scale back its targets for battery-powered electric cars on Wednesday. Instead of 202,000 units sold, the group now only expects 123,000. In the first six months of the financial year, Toyota only sold around 59,000 electric cars. The fact that the Japanese are able to report such high sales figures despite the weakness in electric cars shows that combustion engines and other types of drive continue to find many buyers.
However, CEO Koji Sato, who took office in the spring, has set tough goals for the group in competition with the American Tesla group and the Chinese challenger BYD and wants to sell a total of 1.5 million electrically powered cars by 2026.
Nevertheless, analysts were enthusiastic about the numbers on Wednesday. “It is a very good result and much better than we expected,” Christopher Richter of CLSA Securitites told the Bloomberg news agency. “We are in a recovery phase in the auto market after three years of the pandemic and chip shortages.”
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In addition to the improved sales, the weak yen against the dollar and the euro also played into Toyota’s hands. On the one hand, this allows the Japanese to sell their cars more cheaply in international competition. On the other hand, the group receives more yen for revenues in dollars. The favorable exchange rates resulted in additional profits of 260 billion yen, or the equivalent of 1.6 billion euros, in the first half of the year, as CFO Miyazaki explained. This is likely to result in an increase of the equivalent of 7.4 billion euros over the entire financial year.
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