Toyota Doubles Net Profit in Fiscal Year 2022
Toyota Motor Corporation (TMC) reported a significant increase in net profit for the fiscal year ending March 2023. The company attributed this success to strong vehicle sales and a favorable exchange rate.
TMC's annual profit reached 4.9 trillion yen ($31.9 billion), a substantial jump from the 2.45 trillion yen ($15.9 billion) reported the previous year. Sales also witnessed a notable rise, climbing 21% to 45 trillion yen ($290 billion).
These results surpassed TMC's own projection of a 4.5 trillion yen ($29 billion) profit. Global sales surged to 9.4 million vehicles, compared to 8.8 million vehicles in the previous fiscal year.
Hybrid vehicles performed particularly well, although TMC emphasized its commitment to offering a diverse range of electric vehicles, including battery EVs, plug-ins, and fuel cell models.
A weaker yen provided a significant advantage for TMC, which manufactures popular models like the Camry sedan, Prius hybrid, and Lexus luxury vehicles. The U.S. dollar averaged 145 Japanese yen during the last fiscal year, compared to 135 yen the year before.
For the January-March quarter, TMC earned 997.6 billion yen ($6.4 billion), up from 552 billion yen ($3.6 billion) in the previous year. Sales also increased to 11 trillion yen ($71 billion) from 9.7 trillion yen ($6.3 billion).
Looking ahead, TMC anticipates selling 9.5 million vehicles during the current fiscal year, with sales growth projected in the U.S. and other Asian markets. The company plans to make strategic investments in research and technology to sustain long-term growth.
However, TMC expects its net profit for the fiscal year through March 2025 to decline by nearly 28% to 3.57 trillion yen ($23 billion). This decline is attributed to increased spending on investments in workers at suppliers and dealers, referred to as "human capital."
"The latest results show that our efforts have borne fruit, but we need to keep growing with the vision to become a mobility company," stated Chief Executive Koji Sato.
Sato emphasized the need for Toyota to embrace challenges in a more dramatic way than its traditional "kaizen" approach, which focuses on continuous improvement. Developing ecological vehicles while maintaining Toyota's reputation for safety and quality requires the company to "solidify the ground it's standing on."
The automotive industry is undergoing a significant transformation away from gasoline engines, particularly in markets like China where EVs dominate. Some analysts suggest that Toyota may be falling behind in this transition.
Despite these challenges, Toyota has demonstrated its resilience by rebounding from the production disruptions caused by the pandemic. The company's strong financial performance and commitment to innovation position it well for continued success in the evolving automotive landscape.