Toyota Motor Corp. said Wednesday its operating profit for the year ended March almost doubled from a year earlier to a record 5.35 trillion yen ($34.5 billion), making it the first Japanese company to top the 5 trillion yen mark thanks to robust post-pandemic demand and a weaker yen.
Its net profit for the year ended March 31 doubled to an all-time high of 4.94 trillion yen on its highest-ever sales of 45.10 trillion yen, up 21.4 percent, the automaker said.
But Toyota projects its net profit will fall 27.8 percent to 3.57 trillion yen for the current business year, as it will boost investment to strengthen its technology development for electric vehicles and artificial intelligence by about 40 percent to 1.7 trillion yen.
The record earnings for the last fiscal year reflect a 5.0 percent rise in its global sales volume to 11.09 million vehicles, driven by increasing demand for its hybrid vehicles. Toyota and Lexus brands boosted their combined sales of gasoline-electric powered vehicles 32.1 percent to 3.59 million vehicles.
By region, North America saw the biggest growth in vehicle sales, rising 17.0 percent to 2.82 million units, followed by Europe, which saw a 15.7 percent increase to 1.19 million cars.
Still, its domestic sales fell 3.7 percent to 1.99 million during the 12-month period due in part to a halt in shipments of some models after data rigging in vehicle tests were found at its subsidiary Daihatsu Motor Co. and affiliate Toyota Industries Corp.
"We will spend time and money necessary" for addressing issues related to the group firms' misconduct, which resulted in temporary shipment halt, Toyota President Koji Sato said at a press conference.
The automaker also benefited from the yen's depreciation, which boosted its operating profit by 685 billion yen, with the dollar's rate at 145 yen, stronger than 135 yen the year before. A weaker yen inflates overseas profits when repatriated.
Price hikes and solid sales of models with higher profit margins such as hybrid vehicles also contributed to profit growth.
"Hybrid cars have gained traction gradually in the U.S. market since the launch of the Prius," Executive Vice President Yoichi Miyazaki said at the press conference. "Now they are recognized as a main player."
For fiscal 2024, sales are projected to climb 2.0 percent to 46 trillion yen, while operating profit will fall 19.7 percent to 4.3 trillion yen.
Apart from heftier investment, the company's profits are also expected to be squeezed by higher labor costs as a result of its largest pay hike since 1999 agreed during this year's wage negotiations and human resources investment of 380 billion yen to address the issue of data rigging that led to the quality scandal.
The company's earnings outlook is based on an average U.S. dollar rate of 145 yen, unchanged from its assumption for the past year, while the projected euro rate is 160 yen, compared with 157 yen for the previous year.
The automaker group plans to sell 10.95 million vehicles worldwide for the year, down 1.3 percent from the previous year, it said.
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