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Toyota Raises Net Profit Forecast to Record High, Fueled by Strong Global Sales and Weaker Yen

Toyota anticipates an all-time high net profit of 3.95 trillion yen ($26.1 billion) for the fiscal year ending March 2024, marking a 61.1% surge from the prior year
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Toyota Motor Corporation has raised its fiscal year net profit forecast to a historic 3.95 trillion yen ($26.1 billion), reflecting a 61.1% increase from the prior year. This surge is propelled by the automaker’s record-breaking global production and sales in the first half, as well as the yen’s ongoing depreciation. The company’s operating profit is projected to reach 4.5 trillion yen, signifying a 65.1% gain, while revenue is estimated at 43 trillion yen, up by 15.7%. Approximately 1.18 trillion yen of the augmented operating income is attributed to the impact of foreign currency rates, following a revised exchange rate assumption of 141 yen against the dollar. The weaker yen generally bolsters overseas earnings for Japanese manufacturers, benefiting Toyota by about 45 billion yen for every one-yen weakening in the dollar-yen rate.

Despite a 6% reduction in annual sales expectations for Asia (excluding Japan) to 1.8 million vehicles, Toyota maintained its global forecast at 9.6 million vehicles. This continuity is driven by robust demand in North America and increased vehicle availability in Europe as output recovers. However, concerns persist about certain markets. Chief Financial Officer Yoichi Miyazaki voiced apprehension over evolving market dynamics in China, an uncertain real estate situation impacting Southeast Asia, and shifts occurring in markets like Vietnam and Thailand.

In the Southeast Asian market, uncertainties, including Indonesia’s upcoming presidential elections, and higher interest rates may pose challenges. In China, where competition in electric vehicles is intensifying, Toyota sold a total of 1 million vehicles in the first half of fiscal 2023, roughly the same as the previous year. Toyota has maintained its market share stability in China but noted a surge in discount competition, particularly in the battery electric vehicle sector.

Toyota’s strong brand power, coupled with its ability to offer a diverse range of vehicles, including hybrids and plug-in hybrids, provides a solid foundation amid evolving market dynamics. However, the company is also cognizant of emerging competition from Chinese automakers, particularly in their home market and Southeast Asia, which have traditionally been Toyota strongholds.

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