Japanese automaker Toyota announced on Wednesday that its profits from July to September plummeted by more than half compared to the same period last year due to production shutdowns caused by fraud scandals and recalls.
The company's third quarter financial report shows that Toyota's net profit for the quarter totaled 573.7 billion yen (3.7 billion US dollars), a decrease of 55% from the same period last year's 1.28 trillion yen. Its quarterly sales total still slightly increased, rising from 11.43 trillion yen last year to 11.44 trillion yen.
Toyota's Chief Financial Officer Yoichi Miyazaki stated that the main reason for the decline in production in the first half of the fiscal year is due to certification issues, and Toyota needs to take time to re-examine its manufacturing environment and culture. Previously, due to falsified test data, multiple Toyota cars were closely monitored by Japanese authorities.
Toyota has pledged to invest more funds in human resources and growth areas to improve its business, while advancing the company's multi-path development plan to drive the introduction of hybrid vehicles, fuel cell vehicles, and electric vehicles based on market demand.
The company also emphasized that this investment in talent will be extended to its subsidiaries and supply chain, and it is expected that Toyota's car production will gradually recover in the second half of the fiscal year.
Confidence still exists
Toyota's global car sales exceeded 11 million units in the previous fiscal year, ranking first in the world. And it is expected that its sales will reach 10.85 million vehicles in the fiscal year ending in March next year. But the latest Q2 data shows that Toyota's global sales for the quarter reached 2.3 million vehicles, lower than the expected 2.4 million vehicles.
This is directly related to Toyota's continuous quality scandals. The company acknowledges the existence of widespread quality testing fraud, including data falsification or the use of outdated data in collision testing. Due to the exposure of these fraudulent activities, Toyota has suspended the production of some models.
In addition to counterfeiting, Toyota has recalled its cars multiple times in the United States. According to the National Highway Traffic Safety Administration of the United States, the more than 40000 vehicles recently recalled were due to a lack of power brake assist systems that can extend parking distance.
However, although Toyota's business has been severely impacted this year, it still insists on increasing its annual dividend from 75 yen last year to 90 yen and maintaining its expectation of a full year operating profit of 4.3 trillion yen.
In addition to Toyota, other Japanese car manufacturers have also reported fake news at almost the same time, including well-known brands such as Honda, Suzuki, and Yamaha. Among them, Honda also announced its performance later today. In the second quarter of the 2024 fiscal year ending September 30, Honda's operating profit for the quarter was 257.9 billion yen, far lower than analysts' general expectation of 431.1 billion yen.