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Despite a 42 percent drop in quarterly profit, Toyota lifted its full-year guidance for net income and revenue.

AUTOMOTIVE NEWS

August 04, 2022 02:47 AM UPDATED A MINUTE AGO



TOKYO -- Toyota Motor Corp., coming off a year of record profits, shifted into reverse in the latest quarter as supply chain chaos and soaring costs slammed earnings.

The sliding profits in the April-June quarter underscore the challenge that the world’s largest automaker has in sustaining its stellar performance and big margins going forward.

Despite the quarterly retreat, Toyotalifted its full-year guidance -- slightly -- for net income and revenue. But the adjustment comes mainly from a windfall gain on the weakening Japanese yen.

Even with the improved outlook, the latest profit targets still represent a decline from the previous fiscal year. Toyota kept its unit sales and production outlooks unchanged, citing the uncertain outlook amid the COVID-19 pandemic and global semiconductor shortage.

Operating profit tumbled 42 percent to 578.6 billion yen ($4.24 billion) in the company's fiscal first quarter ended June 30, Toyota said in its quarterly earnings announcement on Thursday.

Operating profit margin fell to 6.8 percent, from 12.6 percent the year before. Net income declined 18 percent to 736.8 billion yen ($5.40 billion), while revenue grew 7.0 percent to 8.49 trillion yen ($62.27 billion).

Global sales slipped 6.3 percent to 2.01 million vehicles in the three months. The consolidated figure covers deliveries for the Lexus and Toyota brands, as well as Daihatsu and Hino. Worldwide retail sales fell 7.8 percent to 2.54 million vehicles in the quarter.

The stumble starts a challenging financial period after a fiscal year in which Toyota smashed earnings records. In the year ended March 31, Toyota achieved all-time highs for revenue, operating profit and net income.
Helping suppliers
But in the latest quarter, production interruptions reduced the supply of new cars and dented sales. Meanwhile, costs spiraled higher as Toyota helped suppliers shoulder the burden for soaring prices of raw materials such as steel and aluminum.
Toyota said earlier this year it would aid suppliers feeling the price pinch.

A tailwind from beneficial foreign exchange rates helped offset a bigger hit from the cost surge.

The yen’s weakening against the U.S. dollar boosts the value of U.S. earnings repatriated to Japan. The Japanese currency has lost 18 percent of its value against the dollar since last year.

Looking ahead to the current fiscal year ending March 31, 2023, Toyota expects operating profit to fall 20 percent to 2.40 trillion yen ($17.9 billion), as net income declines 17 percent to 2.36 trillion yen ($17.6 billion). Toyota is keeping its production plan unchanged at 9.7 million vehicles.

There is too much market uncertainty to warrant a bigger revision right now, it said.
At the same time, Toyota also expects global retails sales to expand 3.1 percent to 10.7 million. If achieved, that would represent a new record for the Japanese carmaker.

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Don't think Denso Toyota parts supplier had a very good q2 profits were down 40%. They seem to be blaming it on chip suppliers.

Geo-political situation with Taiwhan/China is not to good at the moment.

China unleashes its power: Worldwide outrage as ballistic missiles fly over Taiwan prompting Japan to demand 'immediate' halt to military drills or risk destroying peace in the region
  • Five high-powered missiles fired from the mainland flew over Taiwan yesterday
  • The test-firing by Beijing has triggered widespread international condemnation
  • It raised fears that a further miscalculation by China could spark war
China ratcheted up its military intimidation of Taiwan yesterday by firing ballistic missiles which flew over the island and landed in Japanese waters.
As promised by the ruling Communist Party, four days of war games encircling Taiwan began just before 2pm (local time) with wave after wave of rocket launches, while Chinese jets took to the skies and ten warships patrolled the sea.
Five high-powered missiles fired from the mainland flew over Taiwan, Japanese officials said, and plunged into the sea south of Hateruma Island, part of Okinawa. The series of islands are part of Japan’s ‘exclusive economic zone’, which extends 200 nautical miles from its coast.
The test-firing, which triggered widespread international condemnation, was Beijing’s response to US House of Representatives Speaker Nancy Pelosi’s controversial visit to Taiwan earlier this week.



China ratcheted up its military intimidation of Taiwan yesterday by firing ballistic missiles which flew over the island and landed in Japanese waters

It prompted an immediate diplomatic protest by Tokyo and raised fears a further miscalculation by China could spark war. Japan’s defence minister Nobuo Kishi said: ‘This is a grave issue that concerns our country’s national security and people’s safety.’

Foreign minister Yoshimasa Hayashi called for an ‘immediate stop’ to the military drills, adding: ‘China’s actions this time have a serious impact on the peace and stability of the region and the international community.’
And US Secretary of State Antony Blinken warned: ‘Countries around the world believe escalation serves no one and could have unintended consequences that serve no one’s interests.


Taiwan held its breath for two hours yesterday as China flexed its military muscle, with the firing of 11 ballistic missiles being backed up by an array of smaller, shorter-range rockets which landed north-east and south-west of the island
Four of Beijing’s vast fleet of unmanned drones were spotted over Taiwan’s Kinmen Islands, near the Chinese mainland, prompting troops to fire flares in a bid to alter their course.

In another dramatic move, China announced it intended to extent the war games by a day, meaning the missile assaults could continue until Monday.

LINK

How China could STARVE Taiwan into submission... or carry out the biggest, most unimaginably violent amphibious assault the world has ever seen as part of Beijing’s bid for global dominance
China could either starve Taiwan into submission or carry out the most violent amphibious assault the world has ever seen as part of Beijing's bid for global dominance, military expert Samuel Cranny-Evans writes today.

Tensions between China and Taiwan, which Beijing claims as its territory, have escalated in recent days following a historic visit to the island by US House Speaker Nancy Pelosi.

China's President Xi Jinping announced that the country would hold its largest-ever live-fire drills around Taiwan from today, and used Pelosi's trip to the island as an excuse.

Today, China fired nine missiles towards Taiwan - five of which landed in Japanese waters - as Beijing ignored warnings that a miscalculation during the live-fire drills could spark war.

Beijing also scrambled fighter jets and sent some of its most up-to-date warships to surround the island, in what state media said is a rehearsal for an invasion. The drills are due to last until Sunday, and are due to including long-range bombers and hypersonic missiles. China's two aircraft carriers are also holding position nearby.

Self-governed Taiwan's 23 million people live under the constant threat of invasion by China, which views the island as its territory and has vowed to one day seize it, by force if necessary. Beijing tries to keep Taiwan isolated on the world stage and opposes countries having official exchanges with it.



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Taiwan is the worlds bigger auto chip supplier, not good news, if this takes off like Russia/Ukraine war did and sanctions get placed on China, everybody pulls the plug on the manufacturing there pulls out of China it will certainly cause a big headache with no chip supplies/processing of raw materials that goes into electric cars.
 
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Never realised there were so many computer chips in every car 500-1500. US sales got burned a bit last year in 2021with the chip shortages, pleased to hear they are now bring it back in house in the US to manufacture in the future.


2021 chip shortages.
 

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there was another article trending today talking about their sales tanking. who knew bland or fugly would cause sales to drop. are lexus sales down too? they should be. btw I hate the new tundra tv ads. their marketing dept needs fired.
 

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Never realised there were so many computer chips in every car 500-1500. US sales got burned a bit last year in 2021with the chip shortages, pleased to hear they are now bring it back in house in the US to manufacture in the future.


2021 chip shortages.
Interesting on the number of chips - I was saying earlier in the year, on other threads, that higher end vehicles have got to use more chips on lower end vehicles as people were comparing GM sales to Japanese makes. My point was GM focused on Escalades and high end trucks which have got to take a lot more chips vs. Toyota's Camry or the Accord - therefore it isn't apples and oranges to compare GM's volume decline to Honda or Toyota.
 

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You’ll notice that the priority is feeing supply of chips to the most profitable models and trim levels.

Apart from F Series & Full Sized SUVs, most of what Ford builds makes little profit beyond recovering development and build costs. So long as F Series, full sized SUVs and maybe Explorer have decent supply, Ford will still do OK profit wide in spite of continuing paper write downs of Rivian stock value. For all the good talk about newer US Ford Nameplates, global Ranger & Transit sales are probably way more important to sustainable business outside the US.
 

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I read that one Porsche model uses 8000 chips. I was shocked.
 

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^ That cannot be possible. Sure it wasn't '800'?
Until the advent of the System on a Chip (SoC), the most sophisticated chip was the microprocessor. For decades now, there have been more microprocessors in each US-manufactured car than in a computer lab in your child's school. Each microprocessor is supported by a number of support chips, not counting all of the sensors and controls. If Porsche is using less sophisticated Application Specific Integrated Circuits (ASIC) instead of microprocessors, then it is easy to conceive of a Porsche car requiring 8000 chips.
 

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You’ll notice that the priority is feeing supply of chips to the most profitable models and trim levels.

Apart from F Series & Full Sized SUVs, most of what Ford builds makes little profit beyond recovering development and build costs. So long as F Series, full sized SUVs and maybe Explorer have decent supply, Ford will still do OK profit wide in spite of continuing paper write downs of Rivian stock value. For all the good talk about newer US Ford Nameplates, global Ranger & Transit sales are probably way more important to sustainable business outside the US.
Then Ford should have just built F-150, F-250, F-350, Expedition and Navigator? What about all the "returning customers" from Focus, Fusion, Taurus, Escape, Edge and Explorer?
 

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I'm conceiving of a Porsche right now with 1,364,829 chips. Even the tires are filled with chips.

Chips. Dollars. Dollars. Chips.
 

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Heck. My Malibu has pressure transducers and transmitters in the valve stems.
TPMS. As does my Equinox. I even get notifications when they are low on air ,,, or in an instance a couple of months ago when one got a nail in it and took it off out in the shop to fix (patch on the inside) it. Next thing ya know I'm being notified I have a flat tire... 🤪 lol. No kidding. :D
 

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Then Ford should have just built F-150, F-250, F-350, Expedition and Navigator? What about all the "returning customers" from Focus, Fusion, Taurus, Escape, Edge and Explorer?
They did that with prioritising chips to their profit earners and let the other vehicles drift with production. They even view Edge & Escape as commodity products which tells us the love has gone for them.

Ironic that Ford can build Bronco Sport and Maverick in the same plant where similar priced mid sized Fusion and MKZ was considered not worth keeping
 

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They did that with prioritising chips to their profit earners and let the other vehicles drift with production. They even view Edge & Escape as commodity products which tells us the love has gone for them.

Ironic that Ford can build Bronco Sport and Maverick in the same plant where similar priced mid sized Fusion and MKZ was considered not worth keeping
The new-Generation Escape has struggled since it came out, obviously a lot of carry-over (parts) with the Bronco Sport, so a better seller and higher price, no-brainer that Ford made that shift, but Edge was rather strong, especially considering the production delay with the model changeover.

The MKZ was dead with without the Fusion...
 

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My buddy has been waiting for his Corolla Cross for 9 months now. Was supposed to have arrived in "the spring".

He is looking at the 2023 models now and wants the extra features on the new MY. Not happy.
 
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