By Toyota Motor Corp. reported a significant decline in quarterly profits for July-September, attributing the downturn to a certification scandal and subsequent production stoppages.
Toyota’s profit for the July-September quarter fell to 573.7 billion yen ($3.7 billion), less than half of the nearly 1.28 trillion yen earned during the same period last year. Despite the profit drop, the company saw a slight increase in quarterly sales revenue, rising to 11.44 trillion yen ($75 billion) from 11.43 trillion yen.
- Quarterly Profit (Jul-Sep 2024): 573.7 billion yen
- Quarterly Profit (Jul-Sep 2023): 1.28 trillion yen
- Quarterly Sales Revenue (Jul-Sep 2024): 11.44 trillion yen
- Quarterly Sales Revenue (Jul-Sep 2023): 11.43 trillion yen
Impact of Certification Scandal and Recalls
Toyota suspended production on several models after discovering fraudulent testing practices, including the use of inadequate or outdated data in crash tests and incorrect airbag inflation testing. The scandal extended to Toyota group companies Hino Motors and Daihatsu Motor Co., further disrupting production and sales.
The production halt primarily affected Toyota’s Camry sedan and Lexus luxury models, leading to a noticeable dip in vehicle sales. As a result, Toyota sold 2.3 million vehicles globally in the latest quarter, down from 2.4 million the previous quarter.
Table: Quarterly Performance Overview
| Metric | July-Sep 2024 | July-Sep 2023 |
|---|---|---|
| Profit (Yen) | 573.7 billion | 1.28 trillion |
| Sales Revenue (Yen) | 11.44 trillion | 11.43 trillion |
| Global Vehicle Sales | 2.3 million | 2.4 million |
| Full Fiscal Year Profit | 3.57 trillion | 4.94 trillion |
Adjusted Sales Forecast and Recovery Plans
Toyota has revised its sales forecast for the fiscal year, now expecting to sell 10.85 million vehicles, down from the previous expectation of over 11 million. The company remains optimistic about a recovery in vehicle production in the second half of the fiscal year, planning to invest more in human resources and growth areas.
“We understand that addressing the certification issues and reexamining our manufacturing environment and culture is essential for long-term success,” stated Chief Financial Officer Yoichi Miyazaki.
Strategic Shifts and Future Outlook
Toyota is shifting its focus towards a multi-pathway approach, emphasizing hybrids, fuel cells, and electric vehicles to align with market preferences. This strategy aims to diversify Toyota’s portfolio and adapt to the evolving automotive landscape.
Future Initiatives:
- Investment in Human Resources: Enhancing workforce capabilities across subsidiaries and supply chains.
- Expansion of Hybrid and Electric Vehicles: Developing and promoting sustainable automotive technologies.
- Focus on Autonomous Technologies: Pursuing advancements in autonomous driving systems.
These initiatives are part of Toyota’s commitment to innovation and sustainability, ensuring the company remains competitive in the global market.