Toyota overcomes chip shortage to beat Q3 net profit forecast

Toyota on Wednesday posted a forecast-beating net profit of $6.8 billion for the three months to December, even as a global chip crunch and a pandemic-driven parts shortage forced production cuts.

The Japanese auto giant, which kept its crown as the world's top-selling carmaker in 2021, left its annual net profit outlook unchanged but slightly lowered its full-year vehicle sales and production targets.

It posted a 791.7 billion yen net profit for October-December, down 5.6 percent on-year but far better than the 619.2 billion predicted by Bloomberg analysts.

For the nine months to December, the firm logged net profit of 2.31 trillion yen -- a jump of 57.8 percent from the previous year, when virus lockdowns battered the auto industry. Quarterly sales rose by a fifth on-year.

"Despite negative factors such as constraints on supply due to the shortage of semiconductors and the spread of Covid-19, as well as the sharp rise in raw material costs, we achieved higher sales and profits" in the first nine months of 2021-22, Toyota said in a statement.

A weaker yen, "supply chain efforts", marketing initiatives and the appeal of its new products contributed to the profit increase, it added.

When Covid-19 first triggered a global drought of semiconductors -- an essential component of modern cars -- Toyota appeared better placed than its rivals to weather the crunch, having strengthened ties with its domestic suppliers after Japan's 2011 earthquake and tsunami.

But with the crisis showing no signs of ending, the automaker has found itself unable to escape the effects.

Toyota cited "operation instability" on a decision to slightly lower its production projection for the year to 8.5 million units from nine million, having already reduced it from 9.3 million in November.

"Currently, customers have to wait for a very long time to receive our products," Toyota acknowledged.

- 'Adept' procurement -

It said its production plans were as "robust" as possible but that the current challenges made it "very difficult" to predict future performance.

Satoru Takada, an auto analyst at research and consulting firm TIW, told AFP that Toyota has so far weathered a difficult year.

"Sales have been strong" and the company "has been able to offer attractive vehicles", he explained. "Its procurement ability, including from parts makers, remains very adept."

But the fourth quarter could prove more difficult, he warned, as production cuts and "uncertain factors" may take their toll on Toyota's bottom line.

Toyota hung on to its title as the world's top-selling automaker last year when it sold nearly 10.5 million vehicles -- a jump of about 10 percent from 2020, including units made by its Daihatsu and Hino subsidiaries.

The firm increased its lead over German rival Volkswagen, which shifted 8.9 million vehicles in 2021, down 4.5 percent on-year owing to the chip drought.

Separately, smaller rival Honda also announced robust earnings and upgraded its annual profit forecast, thanks to cost-cutting efforts, favourable foreign exchange and the lower cost of sales.

For the nine months to December, Honda's net profit surged 31.1 percent to 582.1 billion yen on sales of 10.68 trillion yen, up 11.8 percent.

It upgraded its annual net profit forecast to 670 billion yen from an earlier projection for 555.0 billion yen. It lowered its sales forecast to 17.04 trillion yen from 17.50 trillion yen.

Honda said the pandemic, rising raw material costs and parts shortages, including semiconductors, remain major challenges but pledged to cut costs and incentives to lift its bottomline.

hih-kaf/sah/jfx

TOYOTA MOTOR

TIW - TELESYSTEM INTERNATIONAL WIRELESS

VOLKSWAGEN

Related Links
Car Technology at SpaceMart.com

Tweet

Thanks for being there;
We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain.

With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords.

Our news coverage takes time and effort to publish 365 days a year.

If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.

SpaceDaily Monthly Supporter
$5+ Billed Monthly

paypal only

SpaceDaily Contributor
$5 Billed Once

credit card or paypal

Paris gives 6-month delay for new crackdown on polluting cars
Paris (AFP) Feb 2, 2022
Drivers of older cars in Paris and its suburbs will have a bit more breathing room before the vehicles are largely banned as part of anti-pollution efforts, with the latest crackdown now set to come in force only next year. Authorities have gradually been removing the oldest and most-polluting vehicles from Paris streets over the past several years with the introduction of mandatory emission ranking stickers, called Crit'air levels. The move was spearheaded by Paris Mayor Anne Hidalgo, who is pl ... read more