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Toyota Motor Corp. has managed to navigate the pandemic and related economic fallout for fiscal 2020, boosting its net profit by 10.3% from the previous year to ¥2.25 trillion, the automaker said Wednesday.

The firm also revealed a projection that about 80% of new car sales by 2030 will be electric vehicles, including hybrids, reflecting its efforts to curb greenhouse gas emissions.

For the current fiscal year through March 2022, Toyota projects the following:

  • Sales of ¥30 trillion, up 10.2%
  • Operating profit of ¥2.5 trillion, up 13.8%
  • Net profit of ¥2.3 trillion, up 2.4%

“We expect unit sales to make a strong recovery. This will be a major factor” in increased profit, Kenta Kon, Toyota’s chief financial officer, said during an online news conference.

For fiscal 2020, the world’s largest automaker beat its forecast of securing ¥2.2 trillion in operating profit, ending up with more than four times its initial projection of ¥500 billion, which was set a year ago amid heightened uncertainties over the COVID-19 outbreak. The firm eventually raised the forecast to ¥2 trillion in February.

The firm posted sales of ¥27.21 trillion, down 8.9%.

Japanese carmakers had initially feared that the economic damage caused by the pandemic would last for the entire fiscal year, which ended in March. But looking back, most of them only suffered a serious blow in the first quarter, between April and June 2020.

As auto demand started bouncing back in crucial markets such as China and the United States in the latter half, Toyota and other carmakers showed a robust recovery in sales.

In April this year, Toyota said it posted unit sales of 982,912 in March — a record for a single month — up 44.2% compared with the same month last year, thanks to strong performance in China and North America.

The steady sales are partly attributed to well-executed launches of new models, such as the Corolla and RAV4, throughout the year.

Toyota Chief Financial Officer Kenta Kon attends an online news conference for the automaker on Wednesday. | KYODO
Toyota Chief Financial Officer Kenta Kon attends an online news conference for the automaker on Wednesday. | KYODO

A recent global chip shortage, meanwhile, has had a big effect on carmakers, forcing them to curtail production, but the impact has been limited for Toyota.

The company has said it managed to secure enough inventory in advance based on lessons from past events, such as the 2008 global financial crisis and the Great East Japan Earthquake in 2011.

“We are seeing (the chip shortage) as a small risk. … It won’t have a significant impact on our operations in the immediate future, but we need to stay vigilant,” Kon said.

As for Toyota’s plan to phase out gasoline-powered vehicles, the firm said that about 80%, or 8 million units, of new car sales will be of electric vehicles including hybrids by 2030. About 2 million units will be completely electric vehicles and fuel-cell electric vehicles, which emit no carbon dioxide while being driven.

Broken down by region, 95% of new Toyota vehicles in Japan will be greener models by 2030, while the ratios are expected to be 70% in the U.S. and 100% in Europe. In China, it will be 100% by 2035, the automaker said.

Although Toyota has been criticized for being slow to launch completely electric vehicle models, the firm stressed that the ultimate goal is to achieve carbon neutrality by 2050 and that getting rid of gasoline-powered cars will not be enough. As a result, measures such as introducing environmentally friendly fuel and reducing carbon dioxide emissions from existing cars will play important roles, too.

“The focus is not the ratio of electrified vehicles, but achieving carbon neutrality by 2050,” said Jun Nagata, chief communication officer at the automaker.

To do that, rather than pursuing a particular technology, Toyota will keep a wide range of options open.

“We will adopt a comprehensive approach to take on this carbon neutrality goal,” he said.

Last month, Toyota’s rival Honda Motor Co. unveiled an ambitious plan to stop selling new gasoline-powered vehicles — including hybrids — by 2040.

The government has set a target of phasing out sales of new gasoline-powered vehicles excluding hybrids by the mid-2030s.

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