Toyota has seen its operating profit soar over the last quarter and while it is performing well in most markets, its financial performance in North America leaves a little to be desired.
Figures released by the Japanese car manufacturer reveal that across April, May, and June this year its operating profit hit 1.12 trillion yen, the equivalent of $7.75 billion. This is a significant increase from 578.6 billion yen ($4 billion) the year prior. Globally, Toyota’s operating profit margin hit 10.6% in the quarter from 6.8% the year before while net income reached 1.31 trillion yen ($9.06 billion), also a significant increase from the 736.8 billion yen ($5.10 billion) last year.
Toyota notes that its strong financials were helped by favorable foreign exchange rates as well as the easing of the semiconductor shortage. However, the carmaker wasn’t satisfied with an operating margin of 3% in North America.
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“We are not satisfied with an operating profit margin of 3 percent in North America, and we need to raise this more,” a Toyota official told Auto News. “As we will be making battery-related investments and producing BEVs there, we will need to prepare for such spending from now. And thus, we will need cash. Our operating profit margin is not at a sufficient level.”
“There is talk of an economic slowdown and interest rate cut in the second half,” the official added. “Moreover, there is also the issue of labor shortage. It is difficult to secure workers in the U.S., including at our suppliers. That said, our car sales have remained brisk and our inventory at dealerships is at four- to five-day levels. We would like to keep running our North American operations while paying attention to any risk of a future economic slowdown.”
While Toyota is not satisfied with its financial results in North America, it did reveal that sales in the market rose 7.4% in the most recent quarter. Additionally, sales in China rose by 8.6% and in Japan by 32%. The company managed to sell a total of 2.33 million vehicles in the quarter, representing an increase of 16%.
