Toyota shrugs off chip supply issues amid higher profit

Toyota’s operating profit rose to 987.9 billion yen ($9.45 billion) from 640,097 billion a year earlier showing a strong recovery from the ravaging COVID-19 pandemic. Net income rose to 838.7 billion yen ($8 billion) from 559 billion yen in the three months ended December 31.

For the fiscal year ending March 31, Toyota now expects record operating profit of 2 trillion yen ($19.13 billion), far higher than an earlier projection of 1.3 trillion yen. Toyota said it expects to sell 9.73 million vehicles this year, up 3.3 percent from a previous forecast of 9.42 million, but still down from last year’s 10.46 million.

The upgraded forecasts highlights Toyota’s growing confidence that it can steadily attract buyers and produce vehicles, even as the industry struggles with a weaker global economy and chip crunch that is hampering production.

If dividing the auto industry into winners and losers, “clearly Toyota is winning,” said Bloomberg Intelligence analyst Tatsuo Yoshida.

‘’An ability to keep pushing out new vehicles such as the popular RAV4 crossover in major markets has been key. “Toyota habitually pursues R& D and product development, therefore flowers are blooming for it even in times like these’’. Yoshida said.

“Toyota was able to recover and increase production as soon as global demand for cars recovered. That helped it stand out from other automakers such as Nissan, which were slower to ramp up production following the initial blow from COVID-19”, said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo.

We have arrived at the crucible of the COVID-19 pandemic as containment measures are tightening to combat a more severe second wave of the virus. Simultaneously, the availability of several highly effective vaccines appears imminent.

In a recent outlook on Japanese auto-industry results, Jefferies analysts Takaki Nakanishi and Lilin Zheng said that Toyota’s retail volumes for the quarter “sharply beat expectations” due to vibrant sales in almost all regions.

Each month since August, Toyota has produced a record number of vehicles. In 2021, it plans to produce an unprecedented 9.2 million cars globally, up 2 percent from its 2019 prepandemic output, Nikkei reported last week without attribution.