Toyota Reports Big Drop in Quarterly Profits
Toyota said that its quarterly profit fell by 43%, which shows how tariffs and rising production costs are putting more and more pressure on the company. The car company said that trade barriers and higher material costs outside of the company made operating income go down a lot during the most recent reporting period.
Even though profits were down, Toyota’s global sales continued to grow, thanks to demand in Japan, North America, and Europe. Company leaders stressed that volumes were still strong even though margins were getting tighter in many vehicle segments.
Source: Industrial Equipment News/Website
Kenta Kon Appointed As Toyota’s New Chief Executive
Toyota said that Kenta Kon, the company’s chief financial officer, will become the CEO and president in April. Kon takes over for Koji Sato, but shareholders need to approve the change at the company’s annual meeting in June.
People said that the change in leadership was a strategic move to speed up change and make more money. Toyota pointed out that Kon has a lot of experience in finance, technology, and projects involving automated driving.
Tariffs And Rising Costs Weigh On Automakers
Japanese car companies are still having a hard time because the US has raised the cost of inputs and put tariffs on trade. Toyota said that tariffs cost them about ¥1.45 trillion in operating profit last year.
These problems are part of bigger problems in the global auto industry. Manufacturers have to deal with rising costs of materials and geopolitical uncertainty that affects supply chains and investment planning.
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Financial Performance Shows Mixed Signals
Toyota said that its group profit for the quarter from October to December was ¥1.25 trillion. That number dropped a lot from the ¥2.19 trillion that was reported for the same time last year.
Even though sales went up by almost 7%, profits went down by 26% over the 9 months ending in December. Higher sales volumes were not enough to fully make up for cost pressures and trade effects.
Koji Sato Remains Influential After Stepping Down
After the change, Koji Sato, who is leaving as CEO, will stay on as vice chairman of Toyota Motor Corporation. He will also keep being the head of important industry groups like the Japan Automobile Manufacturers Association.
Sato said that stepping back will let him work on bigger changes in the industry. He said that the change in leadership was a necessary shift in the direction of Toyota’s future.
Kon Signals Need For More Flexibility In The Workplace
Kenta Kon said that Toyota’s workers are very skilled, but they can be slow to adapt to change. He said that established systems can slow down adaptation in markets that change quickly, even though they work.
Kon stressed how important it is to be more flexible in order to stay competitive in the long run. Leadership wants to find a balance between Toyota’s strong points from the past and making decisions and coming up with new ideas more quickly.
Toyota Keeps Its Full-Year Outlook Despite Problems
Toyota stuck to its prediction that it would make ¥3.57 trillion in profit for the whole fiscal year. The outlook shows a 25% drop from last year’s performance.
Investors liked the news and bought more shares of Toyota, which went up 2%. The company said that expanding partnerships beyond the automotive sector is still a key part of its plan to change how people get around.
