Toyota Motor Corporation has reported a significant decline in its profits for the July to September quarter, revealing earnings of 573.7 billion yen (approximately $3.7 billion). This figure is less than half compared to the 1.28 trillion yen reported during the same quarter of the prior year. The automaker attributed this steep drop to a mixture of production halts linked to a certification scandal and recall issues, which negatively impacted vehicle sales across the board.
In terms of sales revenue, Toyota saw a slight increase, with figures climbing to 11.44 trillion yen ($75 billion) from the previous 11.43 trillion yen. The company, recognized for models such as the Camry and various Lexus vehicles, faced scrutiny following the discovery of extensive fraudulent testing practices. These included the use of outdated data for crash tests and miscalculations regarding airbag inflation testing. The issues weren’t isolated to Toyota alone; associated companies, Hino Motors and Daihatsu Motor Co., were also implicated in these fraudulent testing procedures.
Despite selling over 11 million vehicles globally last fiscal year, Toyota has adjusted its expectations for the current year, projecting sales of approximately 10.85 million vehicles through to March. For the latest quarter alone, Toyota’s global vehicle sales fell to 2.3 million, marking a decline from 2.4 million vehicles sold in the previous quarter.
In response to these challenges, Toyota officials have committed to enhancing their workforce and exploring growth sectors. They are advocating for a diversified approach to vehicle technology, emphasizing investments in hybrids and fuel cells alongside electric vehicles, tailored to consumer demand in different markets. This dedication to improving human resources will also extend to their subsidiaries and supply chain partners. According to company sources, production is anticipated to bounce back in the latter half of the fiscal year.
Producing within Japan has faced setbacks during the first half of the fiscal year due to the ongoing need to resolve certification problems as well as a thorough review of manufacturing practices and corporate culture. CFO Yoichi Miyazaki explained these challenges during a recent press conference. Additionally, operations at their Indiana plant in the United States had to be temporarily halted due to recalls, although production has since resumed.
Toyota, headquartered in Toyota City in central Japan, has maintained its forecast for the entire fiscal year, anticipating a profit of 3.57 trillion yen ($23 billion), which is a decrease from last year’s impressive profit of 4.94 trillion yen. Other Japanese automotive manufacturers, such as Honda Motor Co. and Nissan Motor Co., are expected to announce their financial results soon, shedding light on the wider automotive industry’s current performance and challenges.