Toyota posts profit surge and lifts annual outlook as hybrid sales shine

Toyota reported its first profit gain in six quarters and raised its annual outlook by 15% on Thursday, thanks to a weaker yen and high demand for hybrid vehicles. The company's shares jumped in Tokyo trade after the results, while the strategy of focusing on hybrids seemed to be paying off. The world's largest automaker now forecasts operating profit of 3.9 trillion yen ($24.6 billion) for the year ending March, following a 34% increase in income for the July-September quarter.

Unlike other traditional carmakers that heavily invested in electric vehicles and had to cut billions of dollars in investments when demand for EVs dwindled, Toyota has mainly concentrated on enhancing petrol-electric hybrid technology, which it pioneered with the iconic Prius. This approach has helped Toyota maintain its market share in the United States, despite competition from Chinese EV manufacturers in other regions.

However, Toyota, like other automakers, has faced challenges from higher fuel prices caused by the Middle East conflict. Toyota's chief accounting officer, Takanori Azuma, stated that the company is mitigating the impact of the situation in the Middle East and rising material costs through sales efforts and cost cuts. Prior to the results, Toyota's shares had risen around 8% as investors moved away from AI-related stocks and into blue-chip companies after the US midterm elections.

By afternoon trading, the shares had climbed over 14%, on track for the company's biggest single-day gain since 2008.