New Delhi: Toyota Motor Corp has forecast that its profit would bounce back to pre-pandemic levels this year as it hopes to tackle the global chip shortage unlike its rivals.
Japan’s top automaker, which has been stockpiling the semiconductors that are used in everything from engine maintenance to car safety and entertainment systems, has said that it is not seeing any major short-term impact from the shortage.
Toyota has also announced a USD 2.3 billion share buyback, a one-to-five stock split and set bigger targets for electric vehicles (EVs) production.
The upbeat forecast for the full fiscal year reinforces Toyota’s robust growth momentum that saw its March-quarter profit almost doubling and deepens a performance divergence with its rivals, who are battling billions of dollars of lost revenue due to the chip shortage, the company said.
CFO Kenta Kon said Toyota, famous for its just-in-time inventory management, benefitted from efforts to improve its supply chain management to mitigate the impact of natural disasters following the Fukushima earthquake in 2011.
“We are now able to make assessments of alternative products in a speedy manner. That is one of the factors of us being able to mitigate the impact of semiconductor supply shortages,” he said in a media briefing. However, the shortage situation was still fluid and the impact in the second half of the fiscal year was uncertain, he added.
The global auto industry has been grappling with the chip shortage since late last year, which was worsened in recent months by a fire at a chip plant in Japan and blackouts in Texas where a number of chipmakers have factories.
Toyota said in the last quarter that its output would not be disrupted significantly by the ongoing chip shortages even as Volkswagen, General Motors, Ford, Honda and Stellantis, among others, have been forced to slow or suspend some production.
Toyota shared a reversed course on Wednesday to rise 2.1% after the results, contrasting with a 10% tumble for smaller rival Nissan whose guidance disappointed investors.
The maker of the RAV4 SUV crossover and Prius hybrid vehicles, almost doubled its fourth-quarter operating profit to 689.8 billion yen, beating an estimate of 641.5 billion yen from 10 analysts compiled by Refinitiv.
It forecasts a 14% jump in profit to 2.50 trillion yen for the fiscal year that began on April 1 against an 8.4% profit decline for the year that just ended.
Toyota expects renewed demand in the United States, its biggest market, to drive that recovery and forecasts overall sales to grow 6.4% to 10.55 million vehicles for the year.
Toyota on Wednesday also laid out its EV game plan, saying 8 million of its vehicles would be electrified annually by 2030, or around 80% of its current yearly vehicle sales.
That target compared with Honda’s aim to increase its ratio of EVs and fuel cell vehicles (FCVs) to 100% of all sales by 2040, and Volkswagen’s 2025 deadline to overtake U.S. pioneer Tesla and become the world’s biggest seller of EVs.
Nissan has also set a goal to electrify all of its new models in key markets in the early 2030s.
Toyota executives took pains to defend the automaker’s long-time strategy of selling a mix of fuel-efficient cars that suited each market – gasoline-electric hybrids and plug-in hybrids in some, and battery electric vehicles in others.