Toyota Motor Corp. lowered its annual operating profit forecast by 12.2% to ¥4.7 trillion ($31 billion) as global vehicle sales declined and expenses increased across key markets.
The world’s largest automaker’s operating income fell 13.2% to ¥3.68 trillion in the nine months through December, despite sales revenue rising 4.9% to ¥35.67 trillion. Vehicle sales dropped 4% to 7 million units during the period.
Rising costs hit Toyota particularly hard in North America, where operating profit plunged 67% to ¥172.1 billion. The Japanese market also saw earnings decline 13% to ¥2.34 trillion, partly due to certification issues at subsidiary Hino Motors.
The company maintained its ambitious investment plans, committing ¥830 billion toward human resources and future growth initiatives this fiscal year. This includes expanding electric vehicle and battery operations in China and launching U.S. battery production.
“We’ve enhanced our earning power through product improvements and value chain earnings,” said CFO Yoichi Miyazaki. “But market conditions and increased expenses impacted our performance.”
One bright spot came from Europe, where operating profit rose 31% to ¥373.1 billion on strong cost reduction efforts. The proportion of electrified vehicles also climbed to 45.3% of total sales, up from 35.9% a year earlier.
The weaker yen provided some relief, boosting operating income by ¥490 billion in the nine-month period. However, rising expenses and one-time costs more than offset these currency gains.
