Toyota Motor Corp is forecasting a 20% decline in profit for the current financial year as it invests heavily in its supply chain and strategic initiatives, following blockbuster fourth-quarter earnings. While operating profit surged 78% in the January-March quarter, Toyota’s full-year operating profit reached a record-breaking 5.35 trillion yen ($34.5 billion), making it the first Japanese company to surpass the 5 trillion yen mark. The automaker plans to invest 1.7 trillion yen in growth areas such as artificial intelligence and software, while focusing on its “multi-pathway” strategy that includes hybrids, plug-in hybrids, and EVs.
Despite the optimistic outlook, Toyota is cautious about its operational transformation as it shifts from an automaker to a mobility company. Toyota CEO Koji Sato emphasized the need to protect the supply chain and adapt manufacturing processes. The company’s EV sales remain low, accounting for just 1% of global sales in the last fiscal year, and it aims to sell 171,000 battery EVs in the current financial year. Toyota’s future success in China could be influenced by its EV strategy, as it has partnered with Chinese tech giant Tencent and recently unveiled two new battery EVs for the Chinese market.