Toyota quarterly profit rises, shrugs off microchip supply issues

TOKYO — Toyota showed its strong recovery from the COVID-19 pandemic after reporting that its quarterly operating profit rose to 987.9 billion yen ($9.45 billion) from 640,097 billion a year earlier.

Net income rose to 838.7 billion yen ($8 billion) from 559 billion yen in the three months ended Dec. 31, Toyota said in an earnings statement Wednesday.

For the fiscal year ending March 31, Toyota now expects record operating profit of 2 trillion yen ($19.13 billion), far higher than an earlier projection of 1.3 trillion yen.

Toyota said it expects to sell 9.73 million vehicles this year, up 3.3 percent from a previous forecast of 9.42 million, but still down from last year’s 10.46 million.

The upgraded forecasts highlights Toyota’s growing confidence that it can steadily attract buyers and produce vehicles, even as the industry struggles with a weaker global economy and chip crunch that is hampering production.

If dividing the auto industry into winners and losers, “clearly Toyota is winning,” said Bloomberg Intelligence analyst Tatsuo Yoshida.

An ability to keep pushing out new vehicles such as the popular RAV4 crossover in major markets has been key, he said. “Toyota habitually pursues R&D and product development, therefore flowers are blooming for it even in times like these,” Yoshida said.

“Toyota was able to recover and increase production as soon as global demand for cars recovered,” said Takeshi Miyao, an analyst at consulting company Carnorama in Tokyo. That helped it stand out from other automakers such as  Nissan, which were slower to ramp up production following the initial blow from COVID-19, Miyao said.

In a recent outlook on Japanese auto-industry results, Jefferies analysts Takaki Nakanishi and Lilin Zheng said that Toyota’s retail volumes for the quarter “sharply beat expectations” due to vibrant sales in almost all regions.

Each month since August, Toyota has produced a record number of vehicles. In 2021, it plans to produce an unprecedented 9.2 million cars globally, up 2 percent from its 2019 pre-pandemic output, Nikkei reported last week without attribution.

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