Toyota sees profits rise and shares soar 17%, biggest rise in 39 years

Tokyo | Financial Times Toyota shares registered their biggest rise in almost four decades this Thursday (5), after the world's largest automaker raised its annual profit forecast, driven by the devaluation of the yen and strong demand for hybrid vehicles in the United States.

The Japanese group recorded its first increase in profit in six quarters, with operating results rising 34%, to 1.13 trillion yen (R$39 billion), in the third quarter of this year.

Toyota raised its profit forecast for the full fiscal year by 500 billion yen (R$17.2 billion), to 3.9 trillion yen (R$134 billion), and expanded its share buyback program to 1.3 trillion yen (R$45 billion), compared to the previous plan of 1 trillion yen.

Shares soared nearly 17%, erasing year-to-date losses, amid expectations that U.S. tariffs on auto imports could be reduced following the results of the midterm elections.

That was the biggest single-day rise since October 1987, when markets rallied after the stock market collapse on "Black Monday."

At the same time, Toyota's sales fell 3.4% in the first nine months of the year to 7.5 million units, compared with the same period last year, due to the sharp downturn in the Chinese car market.

However, North American sales grew 1.1% in the first nine months, and the region's operating profit returned to positive territory for the first time since U.S. President Donald Trump imposed tariffs in his second term.

Toyota has pledged to turn to China's most competitive component suppliers, regardless of their nationality, in a sign it is determined to fight back against competition from Chinese electric vehicle makers.

"In purchasing, we select the most suitable parts and technologies based on competitiveness, regardless of the supplier's nationality or business group," said Yoichi Miyazaki, executive vice president.

Toyota also revealed new strategies to better compete in North America, China and the Global South, with a focus on Southeast Asia. In the United States, the company plans to expand domestic production of hybrid vehicles and adopt robots to address rising labor costs.

The automaker stated that it will take the knowledge acquired in China to suppliers in Southeast Asia and Japan, raising the possibility of incorporating more Chinese suppliers into its supply chains abroad.

One of Toyota's main initiatives for the Global South is to bring together its smaller cars into a single vehicle architecture, in order to obtain economies of scale to compete with Chinese rivals.

Toyota also confirmed on Thursday its plans to create a robotics company to accelerate the automation of its production lines and establish a new source of revenue beyond automobiles.