Despite chip shortages leading to production cuts and a 2.5% decline in sales, the global auto giant Toyota achieved a 48% increase in operating profit in the latest quarter.

　　Driven by active cost control and favorable exchange rates, Toyota has also raised its full-year profit forecast to near the highest level in history.

　　Financial report data show that in the third quarter of this year (July-September), Toyota's production has shrunk by about 16%. But operating profit was 750 billion yen (about 40 billion yuan), an increase of 48% year-on-year, and the operating profit margin reached 9.9%. Net profit was 626.6 billion yen, an increase of 33.2% year-on-year; the net profit rate was 8.3%, compared with 6.9% in the same period last year.

　　This level of profit is considered excellent in a normal year.

　　Toyota Motor said recently that it will cut global production for the third time this year. In November, 850,000-900,000 cars will be produced globally, a 15% reduction from the original plan of 1 million. Even with the reduction in production, the output level in November still hit a record high. Toyota lowered its global sales forecast from 10.55 million earlier to 10.29 million, but even so, it increased by 3.7% from the previous year.

　　While lowering sales expectations, profit expectations have been raised.

　　Toyota's profit forecast for this fiscal year has been revised up to 2.8 trillion yen from the 2.5 trillion yen previously forecast. Net income is expected to increase by 8.3% to 2.49 trillion yen.

　　take the cost of surgery

　　Chief Financial Officer Kenta Kon attributes this to: cost control, better inventory management and higher pricing power. For example, tight car supply and high demand have allowed Toyota to curb marketing activities and drastically cut marketing expenses.

　　For example, tight car supply and high demand have allowed Toyota to curb marketing activities and drastically cut marketing expenses.

　　Another source pointed out that due to insufficient car supply, Toyota’s sales commissions paid to 4S stores have been significantly reduced. Relevant statistics show that as of the end of September, Toyota paid a sales bonus of $1,463 for each new car, a decrease of 33%, the lowest value in history. The more obvious comparison comes from Honda and Nissan. The specific figures for the two are US$1705 and US$2156 respectively.

　　Some comments pointed out that Toyota's excellent profit revenue is in sharp contrast with the decline of other multinational auto companies.

　　The difference is that Toyota can keep rising against the trend under the same circumstances. In addition to the above-mentioned factors, it is also inseparable from its clichéd lean management. Toyota has a strong supply chain system. Its subsidiary companies such as Toyota Koribo, Aichi Steel, and Denso have helped Toyota basically achieve self-sufficiency in most parts and can better achieve cost control.

　　Toyota predicts that as the global chip shortage eases, production will gradually rebound from December until next year. However, there are still uncertainties in the supply, and the possibility of further disruption is not ruled out.

　　"The risk is decreasing significantly," Kenta Kon said. "However, we cannot say that the risk is zero."

　　"Global production has fallen, but our suppliers, factories and dealers have made great efforts to supply as many cars as possible," Kenta Kon said. "However, compared with past levels, despite the risk of a decline in production, there will be a considerable recovery."

　　According to Japanese media reports, in mid-October, Toyota informed a parts supplier that “we promise to purchase and restore production. I hope you don’t rest and continue to produce”; In the case of recruiting new employees, we will extend the overtime hours of the working day to deliver the parts ordered by the customer.

　　tone structure

　　Some analysts believe that the increase in the proportion of new car sales of more profitable SUVs is also one of the reasons for profit growth.

　　Data from the survey company IHS Markit shows that by the end of 2021, 38% of Toyota's new car sales will be SUV models, which will increase by 14% in five years.

　　There are public reports that Toyota has gradually accelerated the launch of SUV models in recent years. RAV4, Lingfang, YARIS Cross, Land Cruiser and Corolla Cross have all boosted their performance.

　　Toyota’s Chief Financial Officer Kenta Kon said, “The new car market has strong demand and tight supply, which has led to an increase in used car prices, which has allowed us to reduce the promotional margins.” These factors have made Toyota’s performance in certain areas and pushed up profits.

　　In addition, favorable foreign exchange rates also boosted Toyota Motor. Due to the weakening of the yen, when it exchanged the U.S. dollar back to the yen, the value of the assets denominated in the U.S. dollar rose.

　　Toyota's steady sales control and cost control are excellent, but they are almost meaningless compared to Tesla's third quarter. Tesla's net profit attributable to its parent in the third quarter was US$1.659 billion, a year-on-year increase of 389%. Compared with the shortcomings, it is still much better than the old opponents. Volkswagen’s third-quarter operating profit was US$3.25 billion, a 12% drop from last year. In domestic auto companies, droughts and floods are also uneven. In the third quarter, Changan's net profit increased by 43%, while BYD and GAC fell by 27.5% and 64.7% respectively in the same period.