Toyota Quarterly Results Bode Well for Industry – The Detroit Bureau

Toyota released its earnings results for the first quarter of its 2024 fiscal year, and the results are encouraging for the company and for the industry as a whole. 

“Sales volumes across all regions increased compared to the same period a year earlier due to productivity improvement efforts made together with suppliers,” the company said during in its earnings call.  

For the quarter reported, Toyota sales totaled ¥10.5 trillion, or about $73.6 billion, compared to ¥8,491,116 a year ago, for a 24.2% rise. That represents some 2.53 million Toyota and Lexus vehicles sold globally, rising more than 8% year-over-year. About 34% of Toyota-Lexus vehicles sold were hybrid, plug-in, hydrogen-fueled or battery electric. 

In addition to sales numbers, the official report noted that operating income almost doubled year-over-year, stating income of ¥1.12 trillion yen, or $7.85 billion, compared to ¥578.66 billion last year, for a 94% rise. That number beat analyst projections substantially. 

Based on these numbers Toyota is sticking to its projection of about ¥3 trillion or almost $21 billion in profit for fiscal year 2024. Analysts, however, are predicting a better year with ¥3.6 trillion in profits, and Toyota may yet revise its estimates upward. 

North America and China are key markets

Toyota attributed its promising numbers to increased deliveries in America, where the chip shortage has long kept dealer prices high and inventories low. However, sales in the U.S. are not high enough to make the company happy. Sales in the U.S. rose by 7.4% year-over-year, while U.S. operating profits were about 3%. 

“We are not satisfied with an operating profit margin of 3 percent in North America, and we need to raise this more,” Toyota executives said in the earnings call. “As we will be making battery-related investments and producing BEVs there, we will need to prepare for such spending. Our operating profit margin is not at a sufficient level.”

The company also stated that competition was challenging in the Chinese market due to currency fluctuations and increased competition. China is now the world’s largest single new vehicle market, about twice the size of the North American market. New vehicles sold in China in 2022 amounted to 23,563,247 units, about 10 million units more than the 13,689,240 sold in the United States. Moreover, China’s numbers were up 10%, while U.S. numbers were down 8%. 

Toyota is the second-place automaker in both nations, trailing Volkswagen in China and Ford in the United States. Toyota sold about 2.2 million vehicles in China in 2022, compared to 1.75 million in the U.S.

“We believe it is necessary to improve our [North American] production base to further enhance our volume of supply,” Toyota officials said on the earnings call. “We will continue to work to deliver vehicles as soon as possible, and further improve our profit structure.”

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• Source: https://www.thedetroitbureau.com/2023/08/toyota-quarterly-results-bode-well-for-industry/