TOKYO - Toyota Motor Corp. said Wednesday its net profit fell 14.0 percent in fiscal 2022 from the previous year to 2.45 trillion yen ($18 billion), the first decline in four years due to rising material costs.

Operating profit for the year ended March slid 9.0 percent to 2.73 trillion yen, although the Japanese carmaker posted record sales of 37.15 trillion yen on robust vehicle sales and a weaker yen that bloats its overseas sales when repatriated.

For the current business year through next March, Toyota expects net profit to increase 5.2 percent to 2.58 trillion yen as it expects growth in production capacity. Operating profit is projected to rise 10.1 percent to a record 3 trillion yen on sales of a record 38 trillion yen, up 2.3 percent.

Toyota Motor Corp. President Koji Sato (C) and others attend a briefing on the company's earnings in Tokyo on May 10, 2023. (Kyodo)

The automaker recently had its first leadership change in 14 years with Koji Sato, a former Lexus division head, replacing Akio Toyoda as president at the world's biggest auto seller on April 1 as it accelerates its efforts in electric vehicle development.

Sato vowed to shore up its fledging all-electric car business at a press conference following the release of its earnings, while also saying Toyota will stick to its "multi-pathway strategy" to offer a wide selection of green vehicles, including hybrid cars and fuel cell vehicles.

"The key is to improve our product development capabilities in an agile manner," Sato said of its EVs. "We will also consider partnering with other companies as an option to expand our lineup and make attractive products."

Toyota expects to invest about 5 trillion yen to achieve the goal of selling 3.5 million EVs by 2030.

It plans to show a concept model for the next-generation EV it plans to launch in 2026 at the Japan Mobility Show, a trade fair scheduled to be held in October in Tokyo for cars and various transportation options.

For last fiscal year, rising costs for steel and aluminum pushed down Toyota's operating profit by 1.55 trillion yen, although the positive effect from the falling yen and brisk sales in Japan and other Asian markets helped mitigate some of the impacts, the automaker said.

"We realized there was still room for improvement despite the challenging circumstances," Sato said. "We will boost our resistance to fluctuating factors such as material costs and foreign exchange."

The company said it aims to produce a record 10.1 million cars for the Toyota and Lexus brands in fiscal 2023, up from 9.13 million a year before, as it recovers from a semiconductor shortage that impacted its production last fiscal year.

The auto giant, together with its subsidiaries Daihatsu Motor Co. and Hino Motors Ltd., plans to sell 11.38 million vehicles worldwide, up 7.8 percent.

Toyota Motor Corp. President Koji Sato bows at a press briefing in Tokyo on May 10, 2023, as he speaks about subsidiary Daihatsu Motor Co.'s improper testing of its products. (Kyodo) ==Kyodo

Toyota also said it has restarted shipments of Daihatsu-made vehicles sold under the Toyota brand to Malaysia, Mexico and Ecuador after they were halted following revelations about the subsidiary's improper testing of products.

A review by a third-party organization proved they are all safe to drive, Toyota said, adding it is also in talks with authorities in Thailand and countries in the Middle East to restart shipments to them.

Daihatsu said last month that door parts of four models for overseas markets were "improperly modified" in side collision tests, with the number of affected vehicles amounting to 88,000 units, many of which were sold in Thailand and Malaysia.

Toyota said separately in a release that it has received a joint shareholder proposal from three institutional investors calling on the company to improve disclosure of its lobbying activities regarding climate change.

The company said it is against the proposal, saying it is already committed to updating information on climate-related public relations activities each year.

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