Toyota's operating profit margin reached 10% in the third quarter and cut its production target by another 500000 vehicles this fiscal year.

On February 9th, Toyota announced its results for the third quarter (October-December) of fiscal year 2021 (April 1, 2021-March 31, 2022). Of this total, revenue was 7.79 trillion yen, compared with 8.15 trillion yen in the same period in 2020; operating profit was 784.3 billion yen, down 21 per cent from a year earlier, but higher than the average forecast of 716.8 billion yen by nine analysts; and operating profit margin was 10.1 per cent.

In the first three quarters of the fiscal year (April-December 2021), Toyota's revenue was 23.27 trillion yen, compared with 19.53 trillion yen in the same period in 2020; operating profit was 2.53 trillion yen, compared with 1.51 trillion yen in the same period in 2020; operating profit margin was 10.9%, compared with 7.7% in the same period in 2020.

Toyota adjusted its performance forecast for the current fiscal year. Of this total, revenue fell to 29.5 trillion yen from 30 trillion yen, operating profit margin increased to 9.5% from 9.3%, and operating profit remained unchanged at 2.8 trillion yen ($24.3 billion), below the average forecast of 3.04 trillion yen by 27 analysts.

In addition, Toyota cut its production target by another 500000 vehicles this fiscal year as chip shortages and the novel coronavirus epidemic affected production. Toyota said it would produce 8.5 million vehicles this fiscal year, down from a previous estimate of 9 million. "We don't expect the imbalance in chip supply to be resolved soon, and the future trend of the novel coronavirus epidemic is not clear, and we think this uncertainty will continue into the next fiscal year."

Toyota, like other big global carmakers, has been forced to cut production because the novel coronavirus epidemic has wreaked havoc on global supply chains. This forces it to cut costs in order to make more profits per car.

Strong demand in key markets such as China, the US and Europe has prompted Toyota to boost its profit margins, allowing it to raise prices and reduce incentives to attract consumers. The company has also benefited from a weaker yen, boosting the value of its overseas earnings.