The global leading automotive company Toyota, which has been embroiled in a “quality certification fraud” scandal, announced a record-breaking net profit of 4.5 trillion yen, equivalent to 40.2 trillion won or US$30.28 billion, for the fiscal year 2023, spanning from April 2023 to March 2024. The projected operating profit is 4.9 trillion yen, representing a significant difference of approximately 1.7 times compared to the recently announced results of the global third-ranked Hyundai Motor Group, which amounted to around 26 trillion won.
On Feb. 6, Toyota announced its annual performance outlook during a presentation for the period from April to December 2023. The projected figures indicate that sales will reach 43.5 trillion yen, based on the annual rate, showing a 17 percent increase from the previous year. Operating profit will be 4.9 trillion yen, reflecting an 80 percent increase, and net profit will amount to 4.5 trillion yen, representing an 84 percent increase. Achieving a net profit in the 4 trillion yen range is unprecedented for Toyota since its establishment. The operating profit guidance also significantly surpassed market expectations.
The overall improvement in Toyota’s profit structure is attributed to three key factors: the increasing sales of its hybrid cars, an area where Toyota demonstrates its strength, price hikes in vehicles, and the yen’s depreciation. Toyota holds approximately 60 percent of the global hybrid market share. Following the announcement of its performance results, Toyota’s market capitalization surpassed 50 trillion yen for the first time in history during trading hours on the Japanese stock market.
Toyota’s financial performance stands in stark contrast to recent quality certification scandals involving its subsidiaries. Daihatsu, which manipulated crash test results, halted operations at four factories in Japan, and shipments were suspended in its key Southeast Asian market. Another Toyota subsidiary, Hino Motors, also faced revelations of emissions and fuel efficiency manipulation in 2022.
Some analysts believe that the recent Toyota quality certification scandal could lead to adverse effects on the South Korean automotive industry. It is reminiscent of the situation in 2009 during the Toyota recall crisis when Hyundai Motor and Kia Motors significantly increased their market share in the United States. Despite these observations, Toyota has set its production target for this year at a record high of 10.3 million units. In contrast, Hyundai and Kia Motors have set their production target for this year at 7.44 million units.