Toyota Motor Corporation Reports Quarterly Earnings and Expands Electric Vehicle Ventures
Toyota Motor Corporation has announced its quarterly profits for the second consecutive quarter and unveiled plans to establish a new manufacturing subsidiary in China, dedicated to electric vehicle production. This move aims to enhance its competitiveness in the rapidly evolving automotive sector, particularly among firms that prioritize electric vehicle technology.
The company reported revenues of 12.39 trillion yen, an increase from 12.1 trillion yen, while operating profits decreased to 1.22 trillion yen, down from 1.39 trillion yen.
As the largest automotive manufacturer in terms of sales volume, Toyota experienced a notable 28% decline in operating profits year-over-year during the quarter ending December 2024. This marks the second consecutive quarterly drop in annual operating profits, following a previous decrease of 20%.
Despite the downturn in operational profits, Toyota’s net income surged to 2.19 trillion yen, compared to 1.36 trillion yen during the same period last year. Vehicle sales in the third fiscal quarter fell to 2.44 million units, down from 2.55 million units in the prior year.
Toyota has maintained its expectations for annual profit distribution at 90 yen per share, an increase from last year’s distribution of 75 yen per share.
Establishment of Electric Vehicle Production Facility
The new subsidiary, fully owned by Toyota, will be located in Shanghai, China. It is focused on the design and manufacturing of “Lexus” electric vehicles and their associated batteries, with production anticipated to commence in 2027.
Toyota’s shares rose over 1% on the Tokyo Stock Exchange following the announcement.
In the North American market, operational profits fell by 113.7 billion yen during the fiscal quarter ending December 2024 compared to the same period last year, while profits in Asia declined by over 46 billion yen.
Industry reports indicate that Toyota has lagged in the transition to fully electric vehicles compared to its competitors, having previously concentrated its efforts on hybrid vehicle development.
Revised Profit Forecasts
In a positive development, Toyota has raised its operating profit forecast for the fiscal year ending March 2025 by 9%. This adjustment reflects the company’s confidence in navigating potential challenges, such as U.S. tariff impacts.
The revised forecast for operating profits has been set at 4.7 trillion yen (approximately 30.7 billion dollars), up from earlier estimates of 4.3 trillion yen. In a statement, Toyota explained that this revision is indicative of its strategic initiatives aimed at enhancing profitability through reduced incentives, increased pricing, and stabilized production, along with anticipated benefits from a more favorable exchange rate for the yen.