Japan's Toyota raises its profit outlook after solid earnings helped by a weak yen

TOKYO — Toyota raised its full fiscal year profit forecast Tuesday after reporting its profit in the October to December quarter nearly doubled from the year before.

Toyota Motor Corp.’s third quarter profit totaled 1.36 trillion yen ($9 billion), up from 727.9 billion yen in the same period in 2022, as Japan’s top automaker recovered from losses suffered when the coronavirus pandemic slammed computer chip production.

In the first nine months of the fiscal year, Toyota reported a 3.9 trillion yen ($26 billion) profit, more than double what it racked up the previous fiscal year.

A favorable exchange rate also helped the maker of the Camry sedan, Prius hybrid and luxury models. A weak yen raises the value of overseas earnings when they are converted into yen. The dollar has been trading at about 148 yen lately, up from 140 yen a year ago.

Quarterly sales rose 23% to 12.04 trillion yen ($81 billion) from 9.75 trillion yen.

Toyota, based in central Japan's Toyota city, raised its full fiscal year profit forecast to 4.5 trillion yen ($30 billion), from an earlier forecast of 3.95 trillion yen ($27 billion). It earned 2.45 trillion yen in profit in the year that ended in March 2023.

Toyota also raised its full year sales projection to 43.5 trillion yen ($294 billion), from an earlier estimate of 43 trillion yen ($290 billion). It was 37 trillion yen in the previous fiscal year.

Cost cuts, marketing efforts and the currency exchange effects are behind its revision of its forecast, Toyota said.

The company did not raise its vehicle sales forecast for the full fiscal year, instead cutting it to 9.45 million vehicles. Toyota had earlier expected to sell 9.6 million vehicles. Even the lower forecast is better than the previous fiscal year's sales of 8.8 million vehicles.

The shortage of computer chips has hurt automakers, including Toyota. Production has been suspended recently at Toyota group's Daihatsu Motor Co., which makes small models, under Japanese government orders after the automaker admitted it had faked safety tests for decades.

No major accidents have been reported in connection with the cheating, but the tests will have to be carried out properly. The scandal began after a whistleblower came forward in April 2023. Daihatsu has apologized and promised sweeping reforms of its corporate culture.

The impact on Toyota sales and profits will be relatively limited because the subsidiary makes up a small fraction of Toyota’s massive global sales and production. But Toyota acknowledged sales for the year will decline in Japan because of Daihatsu's problems.

The scandal has been a blow to Toyota’s brand image, as similar irregularities have emerged lately at other group companies like Hino and Toyota Industries.