Toyota Reports Strong Performance Despite Supply Shortages... Q3 Sales Up 11% Year-on-Year

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Suhwan] Toyota Motor Corporation (Toyota) has raised its operating profit forecast for this year, expecting strong sales performance despite the semiconductor supply shortage for automobiles.

On the 4th, Toyota announced its third-quarter results, reporting an operating profit of 750 billion yen (approximately 7.7 trillion KRW).

This figure exceeds the forecast of 553 billion yen (approximately 5.7 trillion KRW).

Third-quarter sales reached 7.55 trillion yen (approximately 78 trillion KRW), an 11% increase compared to the same period last year. This also surpassed the forecast of 7.13 trillion yen.

Toyota subsequently revised its profit forecast for this year upward from the previous 2.5 trillion yen (approximately 26 trillion KRW) to 2.8 trillion yen (approximately 29 trillion KRW).

The sales forecast for this year remains unchanged at the previously expected 30 trillion yen (approximately 310 trillion KRW).

Toyota also announced a plan to repurchase its own shares worth 150 billion yen (approximately 1.55 trillion KRW). This share buyback plan is interpreted as an active effort to enhance shareholder value amid expectations of improved profitability going forward.

Toyota’s upward revision of its profit forecast came amid ongoing semiconductor supply shortages for automobiles and repeated shutdowns of manufacturing plants due to the resurgence of COVID-19 in Southeast Asia.

Toyota stated that despite some supply chain issues, it was able to secure sufficient supply capacity to meet demand.

The company further explained that the supply shortage problem is expected to gradually ease, which underpins the reason for raising the profit forecast.

Bloomberg analyst Yoshida Tatsuo commented, "This is a remarkable performance," adding, "Toyota’s expected earnings exceed market forecasts." However, Toyota warned on the same day that "risks are expected to remain even after December this year."

Experts analyzed that because supply could not keep up with demand, Toyota was able to raise selling prices, which improved operating profit margins.

Morgan Stanley stated, "If the operating profit margin remains at a high level, it will lead to improved profitability," and added, "Toyota is expected to recover its supply capacity starting this month."

Earlier, Toyota had announced last month that the supply situation in Southeast Asia was stabilizing and that production cuts were less severe than expected.

Toyota expects to produce 850,000 to 900,000 vehicles this month, slightly below the initial forecast of 1 million units.

Toyota stated on the day, "Thanks to the efforts of our partners, we were able to produce as many vehicles as possible," and added, "We were also able to benefit from increased demand in the automobile market."

This content was produced with the assistance of AI translation services.