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Toyota profit surges amid hybrid demand as BMW sees net income slump

By Louis Goss

Toyota Motor Corp. on Wednesday said surging sales and higher margins had seen it almost double its profits in its fiscal fourth quarter, but warned its profits will slump over the coming year as it deals with fallout from the scandal surrounding its Asia-focused car brand Daihatsu.

Toyota Motor Corp, the world's largest carmaker by sales, beat expectations in posting an 81% increase in its fourth-quarter profits, to -Yen1,015.8 billion ($6.54 billion), compared to the -Yen755 billion predicted by analysts, Visible Alpha data shows.

The Japanese automobile company sold 7% more of its Toyota and Lexus vehicles.

In 2024, sales of hybrid electric vehicles accounted for 93% of the 3.86 million electric vehicles Toyota sold throughout the financial year.

Toyota's sales, meanwhile, fell by 25% in Japan - despite increasing in all other regions - as its domestic business was hit by the carmaker's decision to suspend all shipments of Daihatsu vehicles last December,

Daihatsu, which mainly makes small cars sold in Japan and emerging Asian markets, shuttered all of its carmaking factories late last year, following revelations the company forged side-collision data for 88,000 vehicles.

Looking into 2025, Toyota told investors it expects its profits will be 28% lower for the year, as the 86-year-old company said it expects its sales will stay roughly flat over the coming year, partly due to the suspension of Daihatsu sales.

The Visible Alpha consensus was for profit growth of 2% in the current fiscal year.

The carmaker said it also expects its margins will drop from rates of 11.9% in the full-year 2024, to 9.3% in 2025, as a result of planned investments, including -Yen380 billion in "human capital" - of which -Yen300 billion will go to suppliers and dealers - and another -Yen1.7 trillion transforming itself into a "mobility company," including by investing in autonomous vehicles.

Shares in Toyota (JP:7203) (TM), listed on the Tokyo stock exchange, fell 1% on Wednesday having surged by 87% over the previous 12 months.

German carmaker Bayerische Motoren Werke , by contrast, reported a 19.4% drop in its net profit, to EUR2.95 billion ($3.17 billion), as falling sales of its motorcycles and Mini and Rolls Royce cars offset a 2.5% increase in sales of the BMW vehicles which account for the vast majority of its group-wide sales.

The German carmaker's margins fell from heights of 12.1% in the first quarter of 2023, to 8.8% in the first three months of 2024, as an "inflation-related increase in manufacturing costs" hit the company's profitability.

Shares in BMW (XE:BMW), listed on the Frankfurt stock exchange, fell 4% on Wednesday having lost 8% of their value over the previous 12 months.

BMW's falling sales were partially offset by a 28% increase in sales of its battery electric vehicles, driven by a 40.6% increase in sales of fully-electric BMWs.

This increase saw sales of electric vehicles account for 13.9% of group wide sales in the first three months of 2024, compared to 11% of sales in the first quarter of 2023.

The Munich headquartered company, nonetheless, held its outlook for the full-year 2024, as it said it expects to benefit from a "slight increase" in global economic growth that it expects will boost demand for its cars.

-Louis Goss

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.


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05-08-24 0601ET

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