Toyota posts profit surge and lifts annual outlook as hybrid sales shine

TOKYO: Toyota on Thursday booked its first profit gain in six quarters and lifted its annual outlook by 15%, as a weaker yen and robust demand for higher-margin hybrid vehicles offset a slide in sales in China and the Middle East.

The results, which helped send Toyota’s shares soaring in Tokyo trade, were the latest sign that the automaker’s strategy of focusing on hybrids was paying off.

The world’s largest automaker said it expects operating profit of 3.9 trillion yen ($24.6 billion) for the year ending March after posting a forecast-beating 34% climb in income for the July-September quarter.

Unlike other traditional car companies that went all-in on electric vehicles and then had to write down billions of dollars in investment when demand for electric cars weakened, Toyota has primarily focused on advancing the petrol-electric hybrid technology it popularised with the Prius decades ago.

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The strategy has been key to its ability to defend market share in its main market, the United States, even as it faces the threat from fast-moving Chinese EV makers elsewhere.

But like other automakers, Toyota has been buffeted by higher fuel prices sparked by war in the Middle East.

Takanori Azuma, Toyota’s chief accounting officer, told a briefing that the company was offsetting the impact of the situation in the Middle East and a surge in material prices through sales efforts and cost reductions.

Shares in Toyota had gained around 8% before the results as investors sold AI-related stocks and bought blue chips after the US midterm elections.

They then extended gains and were up more than 14% in afternoon trade, on track for their biggest one-day gain since 2008.

Operating profit for the July-September quarter came in at 1.13 trillion yen, above a median forecast of 992 billion yen in a poll of nine analysts surveyed by LSEG.