TOKYO – Japan’s Toyota Motor raised its full-year operating profit forecast by nearly 9 per cent on Feb 6, after its third-quarter earnings raced past analysts’ estimates thanks to a weaker yen and strong sales of high-margin cars and hybrid vehicles.

Toyota shares surged 4.4 per cent after the announcement, recovering from a 0.7 per cent fall earlier.

The higher forecast from the world’s best-selling automaker contrasts with the downbeat outlook provided by many of its rivals who have warned of slowing sales growth and announced production cuts this year due to high interest rates and slowing demand for electric vehicles (EVs).

Toyota, a laggard in battery-powered EVs, is seen outperforming competitors this year, helped by robust demand for hybrid vehicles, which it pioneered more than a quarter century ago with the Prius model.

The firm raised its profit forecast for the current year to 4.9 trillion yen (S$44.4 billion) from 4.5 trillion expected previously. That is well above an average analyst forecast of 4.6 trillion yen, according to LSEG data.

Toyota‘s operating profit for the three months to Dec 31 totalled 1.68 trillion yen, up 75.7 per cent from 956.7 billion yen a year earlier and beating the average 1.3 trillion yen profit estimate in a poll of nine analysts by LSEG.

Hybrids accounted for around one third of the total sales of more than 10 million vehicles of its Toyota and luxury Lexus brands last year.

In the fiscal third quarter, hybrid sales soared 46 per cent, contributing to an 11 per cent rise in overall vehicle sales. By geography, North America, Toyota’s biggest market by volume, reported the strongest growth with a 28 per cent sales surge.

Its home market Japan saw sales grow just 5 per cent but reported the highest earnings and margin among its major markets.

A weaker yen currency, which has tumbled around 10 per cent against the US dollar since end-2022, bolstered the impact of Toyota’s robust global sales.

It retained its crown as the world’s top-selling automaker for the fourth consecutive year after posting record annual sales of 11.2 million vehicles for 2023.

But the firm is grappling with a series of scandals at its group companies over product certification test procedures that threaten to hurt its reputation for quality and safety.

Toyota‘s chairman apologised last week for the inconvenience and concern caused by misconduct at two subsidiaries and an affiliate. REUTERS