Toyota is expected to post its first profit drop in two years when it reports second-quarter earnings on Wednesday, signalling cooling demand after a run of robust earnings helped by a consumer shift away from electric vehicles.
The world's largest carmaker is nonetheless expected to deliver almost $8bn (about R140,174,380,800) in quarterly operating profit, benefiting as drivers in several major markets opt instead for petrol-battery hybrids, which typically command higher profit margins than standard petrol cars.
Recent sales and production figures have indicated a modest slowdown for Toyota. It faced a delivery suspension of two models in the US and, like global rivals, is dealing with fierce competition in China, the world's biggest car market and one where demand for EVs has not cooled.
The Japanese carmaker is expected to report a 14% year-on-year operating profit decline in July-September, to 1.2-trillion yen (about R138,385,880,000), according to the average of nine analyst estimates in an LSEG poll.
That would mark its first profit decrease since the same quarter in 2022. It has said quarterly global sales shrank 4% from a year earlier and that output declined 7%.
Toyota's strategy to expand its hybrid line-up in the US might make it less exposed to any reduction in EV subsidies or similar potential policy changes in Washington depending on the outcome of this week's US presidential election.
Hybrids accounted for 41% of Toyota's global sales in July-September, or 1.1-million vehicles, including the luxury Lexus brand, compared to 33% in the same period last year, according to company data.
Among legacy carmakers, Toyota is widely considered one of the slowest to embrace EVs. Battery-only electric vehicles made up only 1.5% of its global sales in the first nine months of the year.
Toyota chair Akio Toyoda argued last month that an EV-only future would lead to job losses across the car industry.
Toyota kept its full-year profit estimate unchanged when it reported earnings for the April-June quarter, forecasting a 20% decline compared to the previous financial year on expected investment in its strategy and suppliers.
Shares of Toyota are up 3% so far this year. In US dollar terms, they are up 2%, compared to a 2% drop in EV rival Tesla over the same period.
Toyota to post first profit drop in two years as demand cools after big run
Image: SOE ZEYA TUN
Toyota is expected to post its first profit drop in two years when it reports second-quarter earnings on Wednesday, signalling cooling demand after a run of robust earnings helped by a consumer shift away from electric vehicles.
The world's largest carmaker is nonetheless expected to deliver almost $8bn (about R140,174,380,800) in quarterly operating profit, benefiting as drivers in several major markets opt instead for petrol-battery hybrids, which typically command higher profit margins than standard petrol cars.
Recent sales and production figures have indicated a modest slowdown for Toyota. It faced a delivery suspension of two models in the US and, like global rivals, is dealing with fierce competition in China, the world's biggest car market and one where demand for EVs has not cooled.
The Japanese carmaker is expected to report a 14% year-on-year operating profit decline in July-September, to 1.2-trillion yen (about R138,385,880,000), according to the average of nine analyst estimates in an LSEG poll.
That would mark its first profit decrease since the same quarter in 2022. It has said quarterly global sales shrank 4% from a year earlier and that output declined 7%.
Toyota's strategy to expand its hybrid line-up in the US might make it less exposed to any reduction in EV subsidies or similar potential policy changes in Washington depending on the outcome of this week's US presidential election.
Hybrids accounted for 41% of Toyota's global sales in July-September, or 1.1-million vehicles, including the luxury Lexus brand, compared to 33% in the same period last year, according to company data.
Among legacy carmakers, Toyota is widely considered one of the slowest to embrace EVs. Battery-only electric vehicles made up only 1.5% of its global sales in the first nine months of the year.
Toyota chair Akio Toyoda argued last month that an EV-only future would lead to job losses across the car industry.
Toyota kept its full-year profit estimate unchanged when it reported earnings for the April-June quarter, forecasting a 20% decline compared to the previous financial year on expected investment in its strategy and suppliers.
Shares of Toyota are up 3% so far this year. In US dollar terms, they are up 2%, compared to a 2% drop in EV rival Tesla over the same period.
Ford to halt production of F-150 Lightning for six weeks
BYD's net profit up 11.5%, revenue beats Tesla for first time
Nissan may partner with Renault on new small EV for Europe
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most read
Latest Videos