TOKYO (Reuters) – Toyota Motor Co. on Wednesday forecast operating profit to fall 20% for the current fiscal year after reporting a record 78% jump in profit in the just-ended fourth quarter.
The world’s top-selling automaker expects operating profit to be 4.3 trillion yen ($28 billion) in the year ending March 2025, up from 5.35 trillion yen in the year just ended.
Toyota (NYSE:) said the forecast takes into account a 380 billion yen investment in “human capital,” including supporting labor costs for suppliers and dealers, as well as investments in its “multi-prong” strategy.
That strategy of using multiple types of powertrains for its vehicles, including hybrids, plug-in hybrids and battery electric vehicles, appears to be paying dividends for Toyota as drivers in many markets have cooled toward electric vehicles in recent months.
In the fourth quarter from January to March, Toyota achieved a 78% increase in operating profit to 1.11 trillion yen. That compared with an average of 747.3 billion yen from nine analyst estimates compiled by LSEG.
The result was helped by a weak yen, which lifted the cost of overseas sales, as well as strong demand.
However, Toyota has its challenges, especially in key markets such as China, where it is struggling to keep up with the pace at which a growing number of local manufacturers are releasing software-powered electric vehicles.
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