Weak yen supports Toyota as China sales weaken

Toyota Motor Corp. reported lower profit and higher sales in its fiscal second quarter on Thursday while raising its full-year profit target. Its July-September net profit fell 19% to 759.4 billion yen from 932 billion yen a year earlier, while quarterly sales rose to 13.4 trillion yen from 12.4 trillion yen.

Toyota now projects a 3.57 trillion yen profit for the fiscal year through March 2027, up from its earlier forecast of 3.25 trillion yen. The new estimate remains below the 3.8 trillion yen earned in the previous fiscal year. The company also expects to sell 9.7 million vehicles globally during the current fiscal year, compared with nearly 9.6 million in the previous year.

Across the first fiscal half, Toyota earned 2.2 trillion yen, up from nearly 1.8 trillion yen, on sales of 26.96 trillion yen, up from 24.6 trillion yen. Vehicle sales totaled 4.76 million, down from 4.78 million. The first-half profit increase contrasted with the 19% decline in second-quarter profit.

Toyota’s quarterly sales increase came despite headwinds from U.S. tariffs and supply disruptions. Rising raw-material costs caused by the war in the Middle East were another headwind.

Toyota also benefited from a weak yen. Like other Japanese exporters, the automaker gains value when overseas revenue is translated into yen. The U.S. dollar was trading at about 158 Japanese yen, up from 154 yen a year earlier.

Vehicle demand was mixed by region. Sales in China suffered partly because of surging gasoline prices. Sales remained strong in the U.S. and held up in Japan and Europe. Overall sales in Asia were flat, though Toyota reported growth in Indonesia and Thailand.

Among the models that sold well recently in Japan were Toyota’s RAV4, bZ4X and Land Cruiser FJ sport-utility vehicles. In the U.S., the Camry and RAV4 hybrids were popular, according to Toyota.

Toyota officials said the company mitigated the impact of rising material prices by optimizing its global supply and maintaining strong sales.

Toyota shares jumped in Tokyo trading after the earnings results were announced, rising to about 3,500 yen from about 3,200 yen.