Toyota is forecast to report its first increase in operating income in six quarters when it publishes results on Thursday, as a weaker yen and robust demand for its more profitable hybrid vehicles offset slumping sales in China and the Middle East, according to Reuters.
The numbers behind the forecast
Operating profit for the world’s biggest automaker in the July–September quarter is predicted to surge 18% to 992 billion yen ($6.3 billion), according to the median estimate of nine analysts surveyed by LSEG, Reuters reports. Revenue was predicted to rise 8% to 13.4 trillion yen. Global sales of Toyota and Lexus vehicles fell 4% to just over 2.5 million units during the period, hit by a 22% decline in China and a one-third drop in the Middle East.
Hybrids carry the quarter
Higher-margin electrified vehicle sales in North America jumped more than 30% to almost 430,000 vehicles, although overall sales volumes in the US rose less than 1%, Reuters reports. The contrast tells the story of Toyota’s year: buyers in its most profitable market are choosing hybrids in large numbers, while fierce competition from domestic brands in China, the world’s largest auto market, continues to squeeze its volumes there.
The longer-term bill
Toyota has estimated it could cost 1 trillion yen annually from 2028 to modernise its factories as it steps up automation and robotics deployment, Reuters reports. That investment programme is the backdrop to Thursday’s figures: a strong quarter helps fund the factory overhaul, but the China question remains the key concern for investors. The results will show whether hybrids alone can keep carrying the world’s largest carmaker while its second-biggest market keeps shrinking.
