About the company

Toyota Motor Corporation is a Japanese automotive company with a rich history and global presence. It has established itself as one of the most important brands in the automotive industry. It is known not only for its quality vehicles, but also for its innovations in manufacturing processes and technology. Its revolutionary Toyota Production System (TPS), often referred to as "Just-In-Time" production, has become the standard for efficiency and quality in automobile manufacturing. Toyota has also become a world leader in hybrid vehicles. Its iconic Prius, introduced in 1997, was the world's first mass-produced hybrid vehicle and laid the foundation for other hybrid technologies. Toyota maintains its leadership position in the automotive industry and remains one of the most popular and trusted brands among consumers worldwide.

A new type of engine with lower emissions

At a joint conference with Subaru and Mazda officials, Toyota unveiled a new engine that is not only less energy-intensive, but can be optimised for a variety of powertrains. Its launch date remains a mystery for now. Toyota sold 2.4 million vehicles in the first quarter of 2024, but plug-in hybrids and EVs accounted for only a fraction of those sales. The Prius maker has lagged behind in the rapidly growing EV market and has tried to approach carbon neutrality in a number of ways. It turns out that this strategy may be paying off for Toyota, as demand for EVs is no longer experiencing such growth. The company's chairman, Akio Toyoda, has expressed his scepticism about electric vehicles, saying that he believes they will reach a maximum market share of 30% and is leaning more towards alternatives such as hydrogen-powered cars or hybrids. Nevertheless, car companies must now look for ways to neutralise their emissions in accordance with international agreements. For example, Europe, which is an important market for the sector, has committed itself to banning the sale of new car models with internal combustion engines completely by 2035. [1]

Testing a new electric car for the Thai market

Despite its priorities, Toyota is also committed to electric vehicles. It is currently testing its new all-electric pickup truck called the Hilux BEV. The carmaker plans to produce the pick up in Thailand by the end of 2025, but has not yet disclosed the price or planned quantities. Pickups are very popular in those parts, accounting for up to half of the vehicles sold there. Thailand is an important market for Toyota, but it faces competition there from both China and Japan. In particular, Japanese carmaker Isuzu Motors is also planning to build its own electric D-MAX pickups in Thailand. [2]

Glass Lewis questions the independence of Toyota's management

Toyota shareholders have been advised to vote against the re-election of chairman Akio Toyoda, who is the grandson of the company's founder, at the June AGM. The recommendation came from Glass Lewis and Institutional Shareholder Services, the advisory firms, with Glass Lewis holding Toyoda responsible for the board members' lack of independence. The same reason was given by the consultancy last year, which resulted in Toyoda being elected with only 85% shareholder support. Such a lack of support is generally not common in Japan. Board members there tend to be elected unanimously. Glass Lewis also recommended that shareholders vote against, for example, taking the Paris Climate Agreement into account in their lobbying activities. [3]  

Economic results

Toyota Motor's 2024 financial year (the period from 1 April 2023 to 31 March 2024) showed remarkable growth, with total sales up 21.4% to JPY45.1 trillion (USD288.6 billion) and operating income rocketing 96.4% to JPY5.4 trillion (USD34.3 billion). Net profit also jumped a sharp 103.4% year-on-year to JPY5.07 trillion (USD32.3 billion). This exceptional performance reflects strong demand for Toyota vehicles and services, along with the company's unwavering commitment to operational excellence and cost management. The strengthening of sales was mainly due to growth in total revenue, which benefited from the weaker yen. Sales of electrified and hybrid vehicles were the biggest driver, recording an increase from nearly 2.8 million vehicles in the previous year to around 3.9 million vehicles in 2024.

Toyota's stock performance over the last 5 years (Source: Google Finance)*

Future prospects

Consolidated results for 2025 are forecast to show a 2.0% increase in sales, but a 19.7% to 27.8% decline in profits compared to 2024.The automaker also forecasts a decline in total vehicle sales to 10.95 million, down from 11.09 million in the previous year.1 However, it expects hybrid vehicles to maintain high sales levels, with a forecast of 4.8 million deliveries. Toyota also plans to buy back more than 3% of its shares, worth JPY1 trillion (USD6.4 billion). [1][2]

Conclusion

Despite a more cautious outlook for the current fiscal year due to softer economic conditions in key markets, Toyota's tremendous profitability, increased shareholder value and efficient asset utilization underscore its resilience and leadership in the automotive industry. As the automaker continues to innovate and focus on changing market dynamics, it remains poised to drive sustainable growth and shape the future of mobility around the world.

Adam Austera, Principal Analyst at Ozios

* Past performance is no guarantee of future results

[1] Forward-looking statements are based on assumptions and current expectations, which may be inaccurate, or on the current economic environment, which may change. Such statements are not guarantees of future performance. They involve risks and other uncertainties that are difficult to predict. Results may differ materially from those expressed or implied by any forward-looking statements.

[1] https://global.toyota/pages/global_toyota/ir/financial-results/2024_4q_summary_en.pdf

[2] https://www.investing.com/news/stock-market-news/toyota-fy-profit-nearly-doubles-as-hybrid-sales-surge-outlook-weaker-3427252

[1] https://www.investing.com/news/economy-news/toyota-showcases-compact-engines-adaptable-to-different-fuels-3458077

[2] https://www.investing.com/news/stock-market-news/toyota-tests-new-ev-pickup-truck-ahead-of-mass-production-in-thailand-3443442

[3] https://www.investing.com/news/stock-market-news/proxy-firm-glass-lewis-recommends-vote-against-toyota-chairman-3458127