Toyota Motor Corporation, the world's largest automaker by sales volume, reported a nearly 28% drop in operating profit for the quarter ending December. Despite this decline, the company saw a significant increase in net income, reaching 2.19 trillion yen from 1.36 trillion yen the previous year. This marks the second consecutive year-over-year decline in operating profit, following a 20% decrease reported in the prior quarter.
Toyota's conservative approach to fully battery-powered electric vehicles has drawn attention as competitors advance in the EV market. The automaker has focused on hybrids, which contributed to its initial operating profit jump earlier in the year due to a sales shift towards high-margin hybrids in the U.S. and the yen's depreciation against the dollar. However, this strategy appears to be facing challenges as lower sales and output volumes indicate a slowdown for the Japanese giant.
In terms of financials, Toyota's revenue increased to 12.39 trillion yen from 12.1 trillion yen, while operating profit dropped from 1.39 trillion yen to 1.22 trillion yen. The company's consolidated vehicle sales fell to 2.44 million units from 2.55 million units a year ago. Despite these downturns, Toyota maintained its full-year dividend forecast at 90 yen, an increase from the previous year's payout of 75 yen.
In response to the shifting market landscape and intensified competition in China, Toyota plans to construct a new factory dedicated to electric vehicle production in the region. This strategic move aims to bolster its presence in the rapidly evolving EV market and align with global trends towards sustainable transportation.
On a positive note, Toyota shares experienced a slight uptick, rising over 1% in Tokyo on Wednesday morning. This increase reflects investor confidence in the company's long-term strategies despite recent profit challenges.