Toyota hits record high profit for the full year and warns that the outlook for 2025 is weak

Toyota's operating profit for the fourth quarter increased 78% to 1.11 trillion yen, which exceeded analysts' average forecast of 747.3 billion yen. Operating profit for the fiscal year ended 2024/3 reached a record high of 5.4 trillion yen, and sales reached 45.0 trillion yen. This is due to the fact that the depreciation of the yen boosted sales value overseas and market demand accelerated, and the biggest sales drivers were electric cars and hybrid vehicles, which increased to nearly 3.9 million units in 2024 from 2.8 million units the previous year.

Toyota also increased its sales volume in the North American market, which accounts for the largest share of total sales volume. The number of units sold in North America in 2024 will exceed 2.8 million units from 2.4 million units the previous year.

As a future outlook, Toyota predicts that operating profit for the fiscal year ending 2025/3 will decrease 19.7% to 4.3 trillion yen, which is lower than the general market forecast of 5.3 trillion yen. According to the company, “human capital” investment of 380 billion yen, including labor cost support for suppliers and dealers, and investment in “multi-path” strategies are taken into account in this forecast.

Toyota also stated that although the group's sales volume for the current fiscal year was 10.95 million units, a slight decrease from 11 million units in the previous fiscal year, sales of hybrid vehicles remained strong, and sales of approximately 4.8 million units are expected in the full year.

Also, it is said that a maximum share buyback of 1 trillion yen (about 3% of the company's shares) will be carried out.

Toyota Motor Corporation is trying to recover from fraud issues discovered by its two subsidiaries. Chief Executive Officer Koji Sato (CEO), who took office as a successor to Chairman Akio Toyoda last year, is making efforts to stop the impact of the incident and restore customer trust.

Demand for Toyota's hybrid vehicles is particularly strong outside of Japan. Also, Toyota is planning to increase EV production, and recently announced plans to invest 1.4 billion dollars to begin EV production at US factories in 2026.

However, Toyota is still facing challenges in the EV market, particularly in major markets such as China. As the number of local manufacturers selling electric cars equipped with software increases, Toyota is struggling not to lag behind.