Toyota’s quarterly profit for July-September plummeted to less than half of what it was the previous year, as the Japanese automaker faced challenges including a production stoppage following a certification scandal and recalls. The company reported a profit of 573.7 billion yen ($3.7 billion) for the quarter, down from nearly 1.28 trillion yen in the same period last year. Despite this decline, sales revenue rose slightly to 11.44 trillion yen ($75 billion) from 11.43 trillion yen.
The certification scandal involved fraudulent testing practices, including the use of inadequate or outdated data in crash tests and incorrect testing of airbag inflation. Toyota, which also owns Hino Motors and Daihatsu Motor Co., apologized for the misconduct and suspended production on some models. The company sold over 11 million vehicles globally in the previous fiscal year but now expects to sell 10.85 million vehicles for the current fiscal year ending in March. In the latest quarter, Toyota sold 2.3 million vehicles, a decrease from 2.4 million vehicles.
Toyota plans to invest more in human resources and growth areas, while also focusing on a diversified strategy known as “multi-pathway,” which includes hybrids, fuel cells, and electric vehicles depending on market demand. The company aims to improve its manufacturing culture and address certification issues that impacted production in the first half of the fiscal year. Toyota’s CFO, Yoichi Miyazaki, mentioned that vehicle production is expected to recover in the second half of the fiscal year, with the Indiana plant in the U.S. already back up and running after temporary halts for recalls.
Despite the challenges faced in the first half of the fiscal year, Toyota is sticking to its full-year forecast of a 3.57 trillion yen ($23 billion) profit, which is lower than the 4.94 trillion yen profit recorded in the previous fiscal year. Other Japanese automakers like Honda Motor Co. and Nissan Motor Co. are also expected to report their financial results in the coming days. Toyota, headquartered in Toyota city, central Japan, is committed to overcoming its recent setbacks and returning to growth and profitability by focusing on investing in its people and adapting to changing market trends.
