Toyota’s net profit more than fivefolded in the first quarter, owing to robust sales fueled by the recovery from the coronavirus crisis, but the company kept its full-year projection unchanged on Wednesday, citing “uncertainties” ahead.
The world’s best-selling automaker has recovered from the impact of Covid-19 lockdowns faster than its competitors, recovering the top rank in sales last year.
Although it is already experiencing some interruption, the Japanese behemoth has so far weathered a global chip shortage that has prompted competitors to cut output objectives.
Sales increased by 72.5% to 7.9 trillion yen. “Despite the semiconductor scarcity and spread of Covid-19, we were able to maintain stable sales and supply in the first quarter,” the company stated in a statement.
However, it kept its full-year net profit target at 2.3 trillion yen, citing “uncertainties in and after the second quarter” as a reason.
Toyota announced last week that group global sales achieved a new high for the six months ending in June, thanks to strong demand for its Highlander and Camry models in the United States, as well as its Corolla and Lexus brands in China.
Satoru Takada, an auto expert at Tokyo-based research and consulting firm TIW, said, “Toyota has maintained its good performance.”
Before the results were revealed, Takada told AFP that the company “had an excellent chance of keeping the title of world’s number one carmaker.”
Because of the global chip shortage, Toyota briefly shut down two domestic plants in June, with a third factory currently experiencing a short shutdown.
Microchips are critical components of current automobile electronics systems, and they have been in limited supply since the end of last year.
Chipmakers moved output to consumer devices as people splurged on equipment to work and relax at home when the pandemic struck, as carmakers worldwide pulled back orders.
As demand increased, automakers were forced to restrict or even stop manufacturing, putting them in a difficult position.
“Semiconductor supplies are projected to remain tight at least until next year,” said Yasuo Imanaka, chief analyst at Rakuten Securities. “The worldwide economic recovery from the coronavirus pandemic should further enhance chip demand in several sectors,” he said.
“In addition to the semiconductor scarcity, the impact of the Delta coronavirus outbreak on both sales and production in Asia is a possible danger for Toyota,” Takada of TIW warned.
On Wednesday, Toyota shares lost their early gains and settled down 0.84 percent, as investors were disappointed by the lack of an upward adjustment. Analysts are also paying attention to the current transition to electric vehicles by major automakers, which is being fueled by increased concerns about emissions.
Toyota, the pioneer of hybrid cars, has unveiled plans for its first global line-up of battery-powered electric vehicles, while other automakers leapfrog Toyota.
Nissan announced plans to establish a huge battery facility in northeastern England, where it will also produce a new electric vehicle, in early July.
Nissan improved its yearly outlook last week, predicting a return to profitability for the current fiscal year.
Honda boosted its full-year prediction later Wednesday after returning to profitability in the first quarter.
Honda’s net profit for the fiscal year ending March 2022 is now expected to be 670 billion yen, up from 590 billion yen previously.