Toyota Achieves Record High Sales
Operating Profit and Net Income Decline
Operating Profit Increases in Q3 Fiscal Year
[Asia Economy Reporter Lee Ji-eun] Toyota Motor Corporation recorded its highest-ever sales for the first to third quarters (April to December) of the 2022 fiscal year, but net profit and operating profit declined due to the impact of rising raw material costs. However, entering the third quarter of the fiscal year, the company succeeded in offsetting the damage caused by raw material prices thanks to the weak yen and increased sales volume.
Toyota Motor announced on the 9th that its sales from April to December last year reached a record high of 27.464 trillion yen. This represents an 18.0% increase compared to the same period last year. However, net profit amounted to only 1.899 trillion yen, down 18% from the previous year. Toyota’s fiscal year starts in April, so April to December last year corresponds to the first to third quarters of the 2022 fiscal year. This is the first time since 2020 that net profit for this period has decreased compared to the previous year.
Operating profit fell 17% to 2.098 trillion yen. However, in the third quarter of the fiscal year (October to December), operating profit surpassed 1.9364 trillion yen, marking a 22% increase compared to the same period last year and successfully reversing the trend to growth for the first time in five quarters. The company explained, "The profits gained from the weak yen and increased sales volume offset the losses caused by the sharp rise in raw material prices."
However, despite the increase in operating profit, Toyota did not revise its existing forecast. Earlier, Toyota had predicted that operating profit for the 2022 fiscal year (April 2022 to March 2023) would fall 20% year-on-year to 2.4 trillion yen. Considering the semiconductor supply shortage, Toyota and Lexus lowered their production plan by 100,000 units from the previous estimate to 9.2 million units.
Experts noted that it is noteworthy that Toyota achieved a profit in operating income for the third quarter of the fiscal year by leveraging the weak yen without reflecting inflation in vehicle prices.
Koogi Nakanishi, Chief Analyst at Automotive Industry Research, told Nihon Keizai Shimbun, "Next quarter, there will be a hit from the yen’s appreciation, but price increases due to inflation will find a balance, and vehicle production is expected to recover. The key factor will be how stable the performance is in the U.S. market, Toyota’s main stage."
However, he also pointed out that Toyota still faces many challenges in management, such as executive changes and the transition to electric vehicles.
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