Stubborn and old-fashioned, yesterday's yellow flowers...... At a time when the transition to electrification is all the rage, Toyota has been repeatedly labeled with various negative labels. Although it is ridiculed by the industry as the "Nokia" of the car industry, Toyota's earning power is still the top car company.
On May 8, Toyota Motor announced its results for fiscal year 2024 (April 1, 2023 – March 31, 2024). In this fiscal year, Toyota's operating income was 45.095 trillion yen (about 2.09 trillion yuan), a year-on-year increase of 21.4%; profit was 5.353 trillion yen (about 248.4 billion yuan), a year-on-year increase of 96.4%; The net profit was 4.945 trillion yen (about 229.5 billion yuan), a year-on-year increase of 101.7%.
In particular, Toyota's astonishing performance in operating profit exceeding 5 trillion yen is the first time in the nearly 100-year history since the establishment of the brand and the first Japanese automaker to achieve this goal.
You must know that the net profit of 18 domestic mainstream car companies, including BYD, SAIC, and Wei Xiaoli, in 2023 will only be about 90 billion yuan, which means that the profit of a Toyota car is higher than that of Chinese car companies combined.
Global sales exceeded 10 million, and hybrids accounted for 1/3
Toyota's success is no accident, and its results in fiscal 2024 are the result of a cautious brand strategy, the strong impact of currency fluctuations, and a strong market performance around the world.
During the new crown epidemic, affected by multiple factors such as rising raw material prices and chip shortages, Toyota, like most companies, experienced a psychological gap between ideals and reality at that time.
It was not until after the end of the epidemic that with the recovery of the supply chain and the recovery of market supply, Toyota's pent-up demand from insufficient supply in previous years was released. At the same time, with the help of a more efficient global system, Toyota has also seized more international market share.
According to the data, in fiscal year 2024, Toyota's global production will reach 9,971,700 units, a year-on-year increase of 9%; Global sales reached 10,309,500 units, a year-on-year increase of 7%.
In terms of regional segments, the North American market, as Toyota's largest automobile market, sold more than 2.8 million vehicles throughout the year, a year-on-year increase of 14%; Europe and India also saw strong growth, with sales growth in China reaching only 1.4 percent, which led to Toyota failing to meet its full-year sales target of 10.4 million units.
In terms of electrification transformation, Toyota has not been too interested in "pure electric", but has focused more on hybrid models, which can be clearly seen from the financial report. Among Toyota's tens of millions of sales, hybrid models gradually took on the role of "carrying the handle" to reach 4.47 million units, an increase of 24.5% year-on-year, accounting for one-third of total sales; The sales of pure electric vehicles were only 116,700 units, accounting for 1.13% of the total sales, and the presence was minimal.
Toyota's profits per vehicle have increased exponentially. According to Toyota's official statement, Toyota's average profit per car last year doubled compared with 2022, reaching 450,000 yen (about 20,900 yuan).
The increase in sales in various regions of the world and the increase in profitability per vehicle have brought rich returns to Toyota. In fiscal 2024, Toyota's operating revenue in Japan increased by 19.6% year-on-year; Operating income in North America increased by 29.6% year-on-year; Operating income in Europe surged 32.9% year-on-year; In Asia, its operating income increased by 8.5% year-on-year.
For Toyota, if you don't want to blindly pursue pure electric vehicles, making money is the first priority.
In addition to the blossoming of production and sales, the depreciation of the yen has also become one of the important factors. In FY2023, Toyota's foreign exchange rate is 145 yen per dollar. By the end of March this year, the yen had depreciated to 155 yen. For Toyota, every 1 yen depreciation will have a gain effect of about 50 billion yen (about 2.3 billion yuan).
In fiscal year 2025, the world's No. 1 Toyota will play the "safety card"?
Despite its ability to attract money, Toyota has lowered its profit forecast for fiscal 2025 (April 1, 2024 to March 31, 2025).
Toyota's official sales revenue for fiscal 2025 is expected to be 46 trillion yen, a year-on-year increase of 2%; Operating profit was 4.3 trillion yen, down 19.7% year-on-year; Net profit is expected to be 3.57 trillion yen, down 27.8% year-on-year.
The official explanation is that Toyota will invest 380 billion yen in "human capital" in the new year to support these labor costs for suppliers and dealers, and to invest in a "multi-channel" strategy.
Not long ago, Toyota's labor union demanded an increase in the payment of higher bonuses to employees, four months more than the previous peak of 7.2 months. Once the request is granted, it will be the highest annual bonus ever for Toyota.
At the same time, Toyota also needs to deal with product quality problems. In 2022, Hino Motors was exposed to problems such as falsification of engine exhaust emissions and fuel consumption data. Japan's investigative committee found that Hino's counterfeiting began at least 2003, spanning nearly 20 years, not around 2016 as previously announced by the company.
Immediately afterwards, negative news related to Toyota cars was repeatedly exposed. Last year, Daihatsu Automobile, a subsidiary, suspended global shipments after it was found to have cheated on a side impact safety test; This year, four engines produced by Toyota's subsidiary, Toyota Industries, were exposed to "falsification of exhaust emission test data".
The rise in labor costs and the public opinion condemnation caused by product quality have greatly reduced Toyota's reputation. However, in the eyes of the industry, Toyota's setback in the Chinese market may be an important factor in this "conservative forecast".
Let's take a look at a set of data first, in the first quarter of 2024, Toyota ranks first among the global auto sales ranking car companies, with a market share of 10.6%, and it is also the only auto group with more than 10%. Among them, the North American market is Toyota's largest market, with a market share of 14%, a year-on-year increase of 1.7%, the European market is 7%, and the southern hemisphere is 14%. It can be said that Toyota's global influence and appeal are still strong.
The only difference is that Toyota's market share in the Chinese market is only 4%, down 1.4% year-on-year. Although Toyota's performance in China is already the best among Japanese brands, it is difficult to hide the weak trend.
"We need to think about how we can change the rules of the game by increasing investment." Toyota's chief financial officer, Yoichi Miyazaki, said that Toyota is far behind its Chinese rivals in some areas and needs to endure several years of difficulties to avoid falling into price competition with local brands.
For Toyota, it is necessary to deal with the impact of the rise of China's own brands, and to launch new car products that adapt to the new energy market, in order to successfully break through in the price war.