Toyota reports booming sales but cautious on profit

Japan’s top automaker Toyota reported record sales for the fiscal year through March on Thursday, but its profit for the latest quarter faltered partly because of a certification scandal.

Toyota Motor Corp’s January-March net profit totalled ¥664.6 billion (US$4.6 billion), down from ¥997.6 billion the same period a year ago. Quarterly sales totalled ¥12.36 trillion (US$85.9 billion), up from ¥11 trillion.

Toyota has been strengthening the testing system of its vehicles after acknowledging wide-ranging fraudulent testing, including the use of inadequate or outdated data in crash tests, incorrect testing of airbag inflation and engine power checks.

Akio Toyoda, Toyota’s chairman and the grandson of the automaker’s founder, has apologised. The wrongdoing did not affect the safety of vehicles already on roads, which include the popular Corolla subcompact and Lexus luxury vehicles.

But the scandal has been a major embarrassment for a manufacturer whose brand has been synonymous for decades with quality and attention to detail.

For the fiscal year through March, Toyota reported a ¥4.77 trillion (US$33 billion) profit, down from ¥4.94 trillion the previous fiscal year.

Annual sales reached a record ¥48 trillion ($333.6 billion), up from ¥45 trillion. Toyota is forecasting sales of ¥48.5 trillion (US$337 billion) for the fiscal year through to March 2026.

Its profit forecast was less bullish, citing costs to meet carbon neutrality demands, as well as the impact of US tariffs on operating income, which was factored in tentatively at ¥180 billion (US$1.3 billion), according to Toyota. That estimate covers April and May, meaning it could grow in the coming months.

Consolidated vehicle sales for the fiscal year through March totalled 9.36 million vehicles, down slightly from 9.44 million vehicles the previous fiscal year.

Cost reduction and marketing efforts worked as pluses countering the negatives, including the production shutdown spanning several months in the United States due to quality issues, Toyota officials said.

Toyota also said the portion of electric vehicles it was selling was steadily growing. Sometimes Toyota has been criticised as falling behind in the global move towards EVs, partly because it has an extensive line-up of other kinds of green cars, including hybrids.

– AP