Toyota Motor is successfully countering the headwinds currently affecting the global automotive industry, standing in stark contrast to German manufacturers like Volkswagen, BMW, and Audi, which have recently reported falling profits or losses. On Thursday, the Japanese industry leader raised its forecasts for the fiscal year running through March. Takanori Azuma, Toyota's financial officer, cited strong hybrid vehicle sales and a weak yen as key factors that helped offset weak demand in China. Additionally, the company returned to profitability in the United States following a loss in the previous quarter.
The market reacted swiftly to the news, with Toyota's stock price rising approximately 15% within an hour on the Tokyo exchange. This represents the strongest single-day gain for the world's largest automaker since the global financial crisis of 2008. Under the new projections, annual revenue is expected to reach 53.5 trillion yen (300 billion euros), a 5.6% increase from the previous year. The operating profit forecast has been raised to 3.9 trillion yen (22 billion euros), representing a 15% jump over prior expectations and a 3.6% growth compared to last year.
Despite these financial improvements, Toyota remains cautious regarding global sales volume. The board adjusted its worldwide vehicle sales estimate downward from 11.2 million to just under 11 million units. Nevertheless, this figure positions Toyota to retain the top spot among global automakers, widening the gap with Volkswagen. The German rival has lowered its sales forecast for the current year to only 8.2 million vehicles, ending a long-standing head-to-head competition between the two giants.
Weakness in China continues to impact Toyota, though less severely than its European competitors due to a more diversified geographic footprint. Between April and September, Toyota sold 25% fewer cars in China compared to the same period last year, with sales dropping to 685,000 units, a level not seen in a decade. In 2025, China accounted for approximately 17% of Toyota's global sales, whereas it represents 30% of Volkswagen's total sales. The company also faced challenges in the Middle East due to the Iran conflict, which disrupted shipping through the Strait of Hormuz and increased material costs. However, Azuma stated that cost-cutting measures and sales efforts successfully mitigated these issues.
Toyota's "multi-powertrain strategy" has proven advantageous as competitors heavily invested in pure battery electric vehicles face weak demand and new competition from Chinese manufacturers, leading to billions in write-downs. In contrast, Toyota has avoided such losses, with high demand for hybrid engines serving as a consistent profit driver over several quarters. For the first half of the fiscal year ending in April, revenue rose nearly 10% to around 27 trillion yen (152 billion euros) despite stable sales volume. Operating income increased similarly to 2.19 trillion yen (12.3 billion euros), maintaining an 8.1% margin, while net profit grew by over a quarter to 2.24 trillion yen (approximately 12.6 billion euros).
Contributing further to the stock surge was the announcement of a new robotics division designed to consolidate the company's existing activities in the field. This move mirrors strategies adopted by other Asian competitors like South Korea's Hyundai and China's BYD. The new unit will be led by production chief Takefumi Shiga, with the goal of accelerating the practical application, commercialization, and deployment of robots, particularly in manufacturing. Toyota intends to leverage its expertise in production and motion control to develop both humanoid and industrial robots.
Sources: FAZ.