Toyota Blames Production Issues for Weak Quarter Results

Japanese automaker Toyota reported lower profits in the last quarter compared to the same period last year. The company made 573.7 billion yen ($3.7 billion), down from 1.28 trillion yen, in the quarter ending Sept. 30. Slower sales and production problems were likely responsible for the poor results.

For the fiscal year, Toyota expects a profit of 3.57 trillion yen ($23 billion). This prediction is lower than last fiscal year’s profit of 4.94 trillion yen.

Weak sales were blamed on increased competition from Chinese brands as well as recall issues with two of its car models in the U.S. Production at an Indiana plant was stopped temporarily due to the recalls. Worldwide, 2.3 million Toyota vehicles were purchased in the last quarter versus 2.4 million for the same quarter in 2023.

Overall, Toyota leadership noted that production in the first half of the fiscal year dropped, blaming certification issues and an alleged fraudulent testing scandal. Meanwhile, the company has committed to addressing those issues as well as reassessing its principles and culture.

The automaker expects to produce 10.85 million units for the full fiscal year, which is 240,000 less than last year. However, depending on market demand, Toyota is considering a ramp-up of hybrid models and electric vehicles moving forward.

The Trouble With Toyota

Earlier this year, Toyota admitted some flawed testing related to insufficient or outdated data used to check airbag inflation and engine power. While the faulty testing didn’t affect vehicles already sold, Toyota had to halt production of some models.

Around the same time, it was discovered Toyota failed to properly certify seven car models, including the RAV 4 SUV, as required by the Japanese government. According to company officials, employees did not fully understand the certification process or how crucial it was. The automaker also expressed regret for the oversight.

“It is with deep regret that we were not able to properly conduct our certification operations, and we apologize to our stakeholders for any concern or inconvenience this may have caused them,” stated Toyota, per AP News.

In September, Toyota was forced to issue a recall notice related to tow hitch covers on Sequoia hybrids. Due to a flaw in the cover, the vehicle’s tow hitch could separate from the bumper while moving, creating an extremely dangerous road hazard.