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Toyota Motor Corp said on Wednesday that it has a chip stock of up to four months and did not immediately expect a global chip shortage to hit production as it increased its year-round profit forecast by 54% higher than expected.
Unlike other automakers, including Japan’s Nissan Motor Co Ltd and Honda Motor Co Ltd, which had to cut production because of a shortage of semiconductors, Toyota increased production for the fiscal year ending in March.
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The shares of Toyota, the world’s largest automaker in vehicle sales, closed up 1.7% after reaching its highest level since July 2015.
“In the short term, we don’t see any decrease in production volume due to the chip shortage, but we do see risks of a chip shortage,” said CFO Kenta Kon during a meeting.
Kon said Toyota heard that the chip shortage globally could continue into the summer, although the situation could resolve earlier.
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Asked why the automaker is seeing a limited impact compared to its competitors, Kon said Toyota has consistently provided its short and long-term production volume plans to suppliers.
The auto industry has struggled with a chip shortage since the end of last year, which in some cases has been exacerbated by sanctions by the former US government on Chinese chip factories.
But the manufacturer of the crossover RAV4 SUV and hybrid Prius said it expects to sell 9.73 million vehicles this year, up 3.3% from the previous forecast of 9.42 million, but still below 10.46 million last year.
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“The fact that Toyota is not largely affected by the chip shortage is now an encouraging catalyst,” said Hideyuki Suzuki, general manager of investment research at SBI Securities.
For the fiscal year ended March 31, Toyota now expects a record operating profit of 2 trillion yen ($ 19.13 billion), much higher than a previous projection of 1.3 trillion yen and well above a average profit forecast of 1.542 trillion yen based on estimates by 23 analysts, Refinitiv data shown.
| Ticker | Safety | Last | change | Change % |
|---|---|---|---|---|
| TM | TOYOTA MOTOR | 154.00 | +1.07 | + 0.70% |
The automaker now expects the yen to trade at 105 yen against the US dollar, against an earlier forecast of 106 yen.
Toyota said operating profit rose to 987.9 billion yen in the three months ending December 31, against an average profit of 565.51 billion yen from nine analysts surveyed by Refinitiv SmartEstimate.
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($ 1 = 104.5700 yen)
(Reporting by Eimi Yamamitsu; Additional reporting by Hiroko Hamada, Tim Kelly; Writing by Tim Kelly; Editing by Kenneth Maxwell and Christopher Cushing)