Toyota posted a forecast-defying net profit of $6.8 billion for the three months to December, the Japanese auto giant revealed Wednesday, despite the global chip crunch and a pandemic-driven parts shortage that forced production cuts.
The carmaker, which kept its crown as the world's top-selling carmaker in 2021, left its annual net profit outlook unchanged but slightly lowered its full-year vehicle sales and production targets.
It posted a net profit worth 791.7 billion yen ($6.8 billion) for October-December, down 5.6% year-over-year but far better than the 619.2 billion yen predicted by Bloomberg analysts.
For the nine months to December, the firm logged a net profit of 2.31 trillion yen – a jump of 57.8% from the previous year, when virus lockdowns battered the auto industry. Quarterly sales rose by a fifth year-over-year.
"Despite negative factors such as constraints on supply due to the shortage of semiconductors and the spread of COVID-19, as well as the sharp rise in raw material costs, we achieved higher sales and profits" in the first nine months of 2021-22, Toyota said in a statement.
A weaker yen, "supply chain efforts," marketing initiatives and the appeal of its new products contributed to the profit increase, it added.
When COVID-19 first triggered a global drought of semiconductors – an essential component of modern cars – Toyota appeared better placed than its rivals to weather the crunch, having strengthened ties with its domestic suppliers after Japan's 2011 earthquake and tsunami.
But with the crisis showing no signs of ending, the automaker has found itself unable to escape the effects.
Toyota cited "operation instability" on a decision to slightly lower its production projection for the year to 8.5 million units from 9 million, having already reduced it from 9.3 million in November.
"Currently, customers have to wait for a very long time to receive our products," Toyota acknowledged.
It said its production plans were as "robust" as possible but that the current challenges made it "very difficult" to predict future performance.
Satoru Takada, an auto analyst at research and consulting firm TIW, told Agence France-Presse (AFP) that Toyota has so far weathered a difficult year.
"Sales have been strong" and the company "has been able to offer attractive vehicles," he explained. "Its procurement ability, including from parts makers, remains very adept."
But the fourth quarter could prove more difficult, he warned, as production cuts and "uncertain factors" may take their toll on Toyota's bottom line.
Toyota hung on to its title as the world's top-selling automaker last year when it sold nearly 10.5 million vehicles – a jump of about 10% from 2020, including units made by its Daihatsu and Hino subsidiaries.
The firm increased its lead over German rival Volkswagen, which shifted 8.9 million vehicles in 2021, down 4.5% year-over-year owing to the chip drought.
Separately, smaller rival Honda also announced robust earnings and upgraded its annual profit forecast, thanks to cost-cutting efforts, favorable foreign exchange and the lower cost of sales.
For the nine months to December, Honda's net profit surged 31.1% to 582.1 billion yen on sales of 10.68 trillion yen, up 11.8%.
It upgraded its annual net profit forecast to 670 billion yen from an earlier projection for 555.0 billion yen. It lowered its sales forecast to 17.04 trillion yen from 17.50 trillion yen.
Honda said the pandemic, rising raw material costs and parts shortages, including semiconductors, remain major challenges but pledged to cut costs and incentives to lift its bottom line.