Toyota’s annual net profit up 10.3% despite virus, chip hurdles

TOKYO – Toyota’s full-year net profit jumped 10.3% even as Covid-19 hit the auto industry, said the Japanese firm today, projecting growth despite the ongoing semiconductor crisis.

The pandemic has hit carmakers hard, with demand collapsing as the virus forces people indoors and affects spending.

But, the world’s top-selling vehicle manufacturer has bounced back quicker than its competitors, and also successfully weathered a chip shortage that has forced rivals to slash production targets.

Toyota said it generated ¥2.25 trillion (RM85.07 billion) in the fiscal year to March, up from ¥2.04 trillion the year before, beating its own annual forecast.

For the year to March 2022, it is projecting an annual net profit of ¥2.3 trillion, up 2.4%, on sales of ¥30 trillion, up 10.2%.

“Toyota’s performance was outstanding compared with its rivals,” Satoru Takada, auto analyst at Tokyo-based research and consulting firm TIW, told AFP before the announcement.

“Toyota has maintained steady production while releasing timely models in major markets.”

The pandemic has taken a heavy toll on the global automobile sector, but demand recovered swiftly in the second half of last year, most notably in the United States and China.

Toyota last year overtook Volkswagen as the world’s top carmaker for the first time in five years.

Even as vaccine roll-outs put the end of the pandemic within sight for the hard-hit industry, it is battling a chip shortage driven by a surge in demand for electronic devices during lockdowns.

Supply disruptions, including a fire at a Japanese factory, an extreme cold snap in the US and a drought in Taiwan, have compounded the mismatch between demand and availability.

Semiconductors are a key component in modern cars, and the shortage has prompted major car manufacturers to reduce production around the world.

However, Toyota has been significantly less affected than its rivals, thanks in part to a forward-planning system intended to protect it from unexpected supply chain disruptions.

It also has close ties with its suppliers, including stakes in some of them, giving it leverage and priority at a time when demand far outstrips supply, said experts.

Yesterday, Toyota’s smaller rival, Nissan, said it narrowed its net loss to ¥448.7 billion for the fiscal year to March, recovering from the pandemic.

But, it expects to stay in the red for the current year, warning that its outlook remains clouded by the global chip shortage. – AFP, May 12, 2021