Japan: Toyota Motor Corporation has reported its first quarterly profit increase in six quarters, supported by strong demand for higher-margin hybrid vehicles and the benefits of a weaker Japanese yen.
The automaker also raised its full-year operating profit forecast by 15 percent, reflecting stronger-than-expected performance despite declining sales in China and the Middle East. The world’s largest carmaker now expects operating profit of 3.9 trillion yen ($24.6 billion) for the financial year ending March 2027. Its operating profit for the July-September quarter rose 34 percent to 1.13 trillion yen, exceeding analysts’ average estimate of 992 billion yen, according to a survey by LSEG.
The improved financial performance highlights the resilience of Toyota’s hybrid-focused strategy with growing competition in the global automotive industry. Toyota’s emphasis on petrol-electric hybrid technology has helped the company maintain its position in key markets, particularly the United States. While several traditional automakers have faced significant financial pressures after making substantial investments in electric vehicle development, Toyota has continued to strengthen its hybrid portfolio, building on the technology popularised through its Prius model.
The company’s latest financial results also boosted investor confidence, with its shares rising more than 16 percent in Tokyo trading, marking their biggest single-day gain since 1987. The rally followed Toyota’s announcement of plans to return up to 14 trillion yen ($89 billion) to shareholders by March 2031. The company also increased its planned share buyback to 1.3 trillion yen from the previous limit of 1 trillion yen.
Despite the positive results, Toyota continues to face challenges in China, where competition from domestic electric vehicle manufacturers is intensifying. However, Chief Financial Officer Yoichi Miyazaki stated that the company had managed to halt the decline in its market share and was beginning to regain ground in the country.
Toyota is also looking beyond conventional automotive manufacturing as part of its long-term growth strategy. The company announced plans to establish a robotics business that will develop robots for manufacturers and other industries, positioning the sector as a potential new pillar of growth.
Meanwhile, higher fuel prices and rising material costs, alongside ongoing geopolitical uncertainties in the Middle East, remain significant challenges. Toyota Chief Accounting Officer Takanori Azuma remarked that the company was addressing these pressures through stronger sales initiatives and cost-reduction measures.
MOST READ | UK interest rates set to rise for 1st time in three years
