ANNIE ALLEN (UK Bureau Chief)
Toyota’s hybrid bet could deliver a powerful earnings comeback, with demand for its more profitable electrified vehicles expected to lift quarterly operating profit despite falling global sales.
The Japanese automotive giant is forecast to post an 18% increase in July–September operating profit to 992 billion yen ($6.3 billion), potentially ending six consecutive quarters without profit growth.
The forecast, based on the median estimate of nine analysts surveyed by LSEG, comes ahead of Thursday’s results. Revenue is projected to climb 8% to 13.4 trillion yen.
Behind the anticipated recovery is a striking contrast: Toyota is selling fewer vehicles worldwide, but stronger demand for higher-margin models is helping cushion the blow.
Combined Toyota and Lexus sales dropped 4% to just over 2.5 million vehicles during the quarter. Deliveries plunged 22% in China and approximately one-third in the Middle East.
North America, however, provided a crucial counterweight. Sales of higher-margin electrified vehicles jumped more than 30% to almost 430,000 units, even as overall US sales rose less than 1%.
Rising petrol prices are strengthening the appeal of fuel-efficient hybrids, according to Marusan Securities analyst Yuya Takahashi. The earnings impact depends heavily on how many of those more profitable vehicles Toyota sells.
A weaker yen and the absence of US tariff-related costs incurred a year earlier are also expected to support the recovery.
Yet China remains a pressure point. Fierce competition from domestic manufacturers and the rapid shift towards electric vehicles are challenging Toyota’s petrol- and hybrid-heavy range.
Investors will also scrutinise the cost of its next technological push. Toyota estimates that modernising factories through automation and robotics could require one trillion yen annually from 2028, alongside its investments in vehicle software and autonomous driving.
For now, the expected rebound carries a compelling message: Toyota’s hybrid strategy could turn shrinking sales into rising profits.
©Copyright MOTORING WORLD INTERNATIONAL. All rights reserved. Materials, photographs, illustrations and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior written permission from Motoring World International
Contact: editor@motoringworldng.com
