Last April, Toyota President Hiroshi Sato, who took office, submitted his first full fiscal year financial report.
Toyota Motor's financial report for the fiscal year 2024 (April 1, 2023 to March 31, 2024) showed an operating profit of 5.353 trillion yen, a year-on-year increase of 96.4%. IPG China's Chief Economist, Bai Wenxi, stated in an interview with the New Beijing News and Shell Finance reporter that Toyota has performed well in the field of hybrid vehicles, while its traditional fuel vehicles still maintain strong profitability.
Sato Hengzhi repeatedly emphasized at the financial report press conference that "consolidating the position is the most important issue"; For the fiscal year 2025, Toyota expects its operating profit to be 4.3 trillion yen, a year-on-year decrease of 19.7%.
Recently, it was reported that Toyota may adopt BYD DMI technology (super hybrid technology) in the Chinese automotive market in the future. On May 10th, Toyota China responded to official news that there was no certainty that the cooperation between Toyota and BYD was mainly focused on the BEV (pure electric vehicle) field and did not involve other areas.
Operating profit exceeded 5 trillion yen, leading to a decline in sales in the Chinese market
In the fiscal year 2024, Toyota's sales revenue was 45.1 trillion yen, a year-on-year increase of 21.4%; The net profit attributable to the owners of the parent company was 4.945 trillion yen, a year-on-year increase of 101.7%; The operating profit was 5.353 trillion yen, a year-on-year increase of 96.4%; The sales profit margin is 11.9%. Toyota stated that it is mainly due to the increase in sales of electrified models centered around hybrid vehicles, as well as the improvement in revenue structure brought about by the best-selling high-income models.
Toyota's main financial data. Image/Car company official website
In the fiscal year 2024, Toyota (including Lexus, Hino Motors, and Daihatsu) sold a total of 11.09 million vehicles, a year-on-year increase of 5%; But Toyota's original sales target was 11.38 million vehicles, which also means that Toyota has not achieved the set target.
Qu Fang, an investment advisor at Wanlian Securities, said that Toyota's significant growth in performance is due to both inevitable and accidental factors; The depreciation of the Japanese yen has increased Toyota's overall profits, which is a sporadic factor. The 24.5% growth in its hybrid vehicles is the core driving force for Toyota's performance growth. In the fiscal year 2024, the cumulative sales of Toyota's electrified models (including hybrid vehicles, plug-in hybrid vehicles, pure electric vehicles, and fuel cell vehicles) reached 3.855 million units, a year-on-year increase of 35.3%, and their proportion in overall sales increased to 46.4%.
However, Toyota's revenue in the Chinese market is showing a downward trend. Toyota's financial report shows that in 2023, Toyota (including Toyota and Lexus) achieved a slight year-on-year increase of 1.4%; However, Toyota's sales in the Chinese market decreased by 1.7% year-on-year in 2023.
From the perspective of operating performance, Toyota's combined subsidiary revenue in the Chinese market was 195.6 billion yen, a year-on-year increase of 1.1 billion yen, accounting for less than 4% of Toyota's total profit. From the performance of its joint venture companies, according to GAC Group's 2023 financial report, GAC Toyota's sales in 2023 were 950000 vehicles, a year-on-year decrease of 5.47%; Revenue decreased by 6.52% year-on-year to 152.869 billion yuan. FAW Toyota has not released any relevant data.
Toyota's sales in the Chinese market in the first quarter of this year were 374000 units, a year-on-year decrease of 1.6%; The merger of subsidiaries in the Chinese market resulted in a profit of 56.8 billion yen. But in the Chinese market, the investment profit accounted for using the Asso equity method was 48 billion yen, a decrease of 34% year-on-year. Industry insiders believe that Toyota's poor performance in the Chinese market is related to its slow pace of electrification. Bai Wenxi believes that the improvement of domestic brand competitiveness and the rapid development of electrification and intelligence pose challenges to Toyota's market share.
Behind the expected decline in profits: Toyota's anxiety is not limited to the slow pace of the pure electric vehicle industry
Sato Hengzhi stated that "we will face the issue of Toyota's insufficient surplus and strive to consolidate our position, which is the most important thing for future growth." In the face of the 2025 fiscal year, Toyota has given a relatively weak forecast: Toyota expects operating profit to be 4.3 trillion yen, a decrease of 19.7% compared to the same period; The expected net profit is 3.57 trillion yen, a year-on-year decrease of 27.8%.
Bai Wenxi believes that this is related to factors such as supply chain challenges, intensified competition, and significant initial investment in the transition to electrification; Especially the electrification transformation requires a large amount of research and capital investment, which may put pressure on profits in the short term. In addition, scandals such as Hino tampering with emission certifications and cheating in Daihatsu crash tests have also had an impact on Toyota to some extent.
"The biggest anxiety in Toyota's development may come from the rapid development and competitive pressure of the new energy vehicle market." Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, said, "With the increasing global requirements for environmental protection and energy conservation, the new energy vehicle market is rapidly developing, and major car companies are actively laying out and competing. At the same time, the competitiveness and electrification level of Chinese brands are also constantly improving, which may have a certain impact on Toyota's position in the Chinese market."
In the previous fiscal year, Toyota had 116500 pure electric vehicles, accounting for only 1% of Toyota's global sales, far below the previously set target of 202000 vehicles.
From May 9th to May 10th, reporters visited multiple FAW Toyota 4S stores and GAC Toyota 4S stores in the Beijing area and found that currently bZ4X and bZ3 have varying degrees of discounts.
A salesperson from a certain FAW Toyota 4S store in the Beijing area said that the maximum discount for bZ4X can reach 70000 yuan at present. "If it is a replacement, there is also a subsidy, including installment plans such as zero interest rate or zero down payment." He said, "Currently, the number of consumers who come to the store for consultation has increased significantly." A salesperson at a Guangzhou Toyota 4S store in the Beijing area said that currently, only the Platinum Smart 4X pure electric car is available for sale in the store, with a discount of 5000 yuan. In the case of a replacement, you can also enjoy a replacement subsidy. But the salesperson said, "Actually, consumers who come into the store are more interested in models such as the Highlander and Camry."
Qu Fang stated that Toyota has always regarded hybrid vehicles as its core. On the one hand, the recent management still maintains the development concept of traditional cars, which is also a practical dilemma for large traditional enterprises to turn around; On the other hand, it is related to the development of pure electric vehicles in Japan. He further stated that Toyota's attitude towards electric vehicles has changed in recent years and has now established a dedicated electric vehicle research and production base in China; However, based on the current penetration rate and development speed of China's new energy vehicle market, it undoubtedly missed the optimal stage of new energy vehicle development.
Wang Linlin, reporter from Beike Finance of the New Beijing News