Toyota posts record first-half profit, sales
TOKYO: Toyota Motor Corp posted record group net profit and sales for the April-September period yesterday on robust global demand even amid industry headwinds deriving from the US-China trade war and rising costs to develop self-driving and other advanced technologies.
Group net profit rose 2.6% from a year earlier to 1.27 trillion yen ($11 billion), hitting a record high for the first time in four years. Sales grew 4.2% to 15.29 trillion yen, logging a record for the third straight year.
Consolidated operating profit increased 11.3% to 1.40 trillion yen as cost-cutting efforts and increase in sales helped offset the negative impact of foreign exchange rates due to the stronger yen.
For the year to March 2020, Toyota maintained its earnings outlook, expecting group net profit to rise 14.2% from a year earlier to 2.15 trillion yen. It also kept its group operating profit outlook at 2.40 trillion yen, down 2.7%, and sales projection at 29.50 trillion yen, down 2.4%.
While some of its US and German rivals have suffered from slower growth in the Chinese and US auto markets, Toyota said it saw solid sales in Japan, North America and China, thanks to the introduction of new models, including its RAV4 sportutility vehicles and Corolla sedan.
Its global sales, including those of its Daihatsu Motor Co and Hino Motors Ltd subsidiaries, rose to a record 5.45 million units in the first half, up 161,000 from the year earlier.
“As demand for SUVs is strong in the United States, we could lower payouts of incentives to dealers for sales promotion,” said Toyota’s operating officer Kenta Kon. “In China, our hybrid vehicles are becoming popular.”
As for the consumption tax hike from 8% to 10% implemented in Japan on Oct 1, Kon said Toyota did not expect a big impact thanks to changes in the government’s tax system to alleviate any negative effect on vehicle sales.
Toyota slightly downgraded its projection for group global sales to 10.70 million units from 10.73 million units, due to shrinking demand in India, Indonesia and Thailand.
Nonetheless, full-year global sales are expected to reach a record volume, up from 10.60 million a year earlier.
The Japanese auto giant has been focusing on investments in new technologies and forming alliances in the fiercely competitive industry that is quickly shifting to self-driving, connected and fuel-efficient vehicles.
Among recent moves, Toyota said in September that it would raise its stake in Subaru Corp to 20% to boost their joint development of advanced vehicles, making its 14-year-old partner an equity-method affiliate whose earnings are incorporated into Toyota’s consolidated financial statements.
The deal followed Toyota’s capital tie-up agreement in late August with Suzuki Motor Corp to jointly work on autonomous vehicles.
“We will continue to be proactive and open in allying with firms within our group, with our (existing) partners and with those outside the auto industry,” Kon said.
In a drive to push alliances, Toyota also said yesterday that it has agreed with BYD Co Ltd of China to establish in 2020 a joint company in China to research and develop battery-powered electric vehicles, with the two companies evenly sharing 50% of the capital.
The companies said in July they would jointly develop electric vehicles to be introduced in the Chinese market in the first half of the 2020s.