Toyota (TM.US) steps out of the shadow of the cheating scandal, with a significant increase in domestic sales in January.
27/02/2025
GMT Eight
Toyota Motor Corp. Sponsored ADR (TM.US) saw a rebound in sales in its home country of Japan, recovering from the previous certification testing scandal and offsetting slowing sales overseas. Data shows that Toyota Group's global sales in January, including subsidiaries Daihatsu Motor and Hino Motors, increased by 2% over the same period last year to 846,744 units, setting a January sales record; global production in January increased by 12% year-on-year to 885,346 units.
In Japan, Toyota Group's sales in January increased by 26% year-on-year, with both the Toyota and Lexus brands seeing a 13% increase in car sales. In China, the world's largest automotive market, fierce competition from competitors like BYD Company Limited led to a 14% year-on-year decrease in car sales for the Toyota and Lexus brands in January. In the United States, President Trump's tariff policies also posed challenges for Japanese car manufacturers like Toyota.
With the rebound in sales in its home country of Japan, Toyota has finally begun to show signs of recovery. Last year, a series of scandals and large-scale overseas recalls forced the company to cut production and resulted in declining sales - a test data falsification scandal in 2024 even led to the suspension of production of some models.
However, despite delivering 10.8 million cars in 2024 - a decrease from the previous year, Toyota still managed to beat Volkswagen, retaining the title of the world's largest automaker for the fifth consecutive year.
The financial report released earlier this month showed that in the third quarter of the fiscal year ending in December 2025, Toyota's operating profit was 1.22 trillion yen, a 28% decrease year-on-year, falling short of analysts' average expectations of 1.42 trillion yen. However, Toyota raised its profit forecast for the current fiscal year ending in March 2025 by 9% from the previous estimate of 4.3 trillion yen to 4.7 trillion yen, showing confidence in weathering the potential impact of American tariffs.
Toyota stated that the increase in operating profit forecast reflects the company's efforts to enhance profitability through control of incentive measures, price increases, and stabilizing production. The company also expects to benefit from the weakening of the yen. Analysts on average expect Toyota to achieve an operating profit of 4.8 trillion yen for the full fiscal year 2025, as strong demand for hybrid vehicles in the United States offsets the sluggish sales in Japan and China.