Media365
Toyota reports its first quarterly profit growth in six quarters as a weaker yen and strong hybrid vehicle demand offset sluggish sales in China and the Middle East. The Japanese automaker also raises its full-year operating profit forecast by 15%.
Toyota Motor has finally returned to profit growth after six consecutive quarters of decline, signalling a recovery for the world’s largest automaker amid challenging global market conditions.
The Japanese carmaker on Thursday reported a 34 per cent jump in operating profit to 1.13 trillion yen ($7.1 billion) for the July-September quarter. The figure comfortably beat the median analyst estimate of 992 billion yen, according to a poll by LSEG.
The improvement was driven primarily by a weaker Japanese yen and resilient demand for hybrid vehicles, which helped offset declining sales in key markets such as China and the Middle East.
Why are Toyota’s profits rising?
A weaker yen has emerged as a significant tailwind for Toyota. As a major exporter, the automaker benefits when the Japanese currency depreciates against the US dollar, as overseas earnings translate into higher yen-denominated revenue.
Strong demand for hybrid vehicles has also supported the company’s performance. Toyota has maintained a strong position in the global hybrid market, benefiting from consumers seeking fuel-efficient vehicles without making a complete transition to electric cars.
However, the recovery comes against a mixed global sales backdrop. Weakness in China, where domestic electric vehicle manufacturers have intensified competition, and softer demand in the Middle East continue to pose challenges.
More from BusinessToyota raises annual profit outlook
Alongside its quarterly results, Toyota raised its operating profit forecast for the financial year ending March 2027 by 15 per cent.
The automaker now expects operating profit of 3.9 trillion yen ($24.6 billion), compared with its earlier projection of 3.4 trillion yen.
The upgraded outlook reflects confidence that currency benefits and demand for hybrid vehicles can help sustain its earnings recovery.
However, intensifying competition in China, geopolitical uncertainties and changing global automotive demand remain key risks to watch.
