Toyota intends to accelerate investments in AI EVs amid expectations of lower profits
Date
5/12/2024 8:58:28 AM
(MENAFN) Toyota, the world's largest car manufacturer, anticipates a significant 20 percent decline in its annual profits. In response to this projection, the company is intensifying its investment efforts in electric vehicles (EVs) and artificial intelligence (AI) technologies, aiming to catalyze a transformative shift in the automotive industry and enhance competitiveness vis-à-vis Chinese rivals.
Upon the announcement of the weak earnings forecast, Toyota shares experienced a brief downturn, plummeting by up to 3 percent. This dip occurred despite the company's remarkable performance in the preceding year, marked by record profits propelled by robust sales of hybrid vehicles. These hybrids, which operate on both fuel and electricity, thrived amid favorable market conditions and the relative weakness of the Japanese yen.
For the fiscal year 2024, slated to conclude in March 2025, Toyota anticipates operating profits of 4.3 trillion yen, equivalent to approximately 28 billion US dollars. However, these projections fall notably below analysts' expectations, reflecting the anticipated challenges and headwinds facing the automotive giant.
Koji Sato, CEO of Toyota, emphasized the company's strategic focus on consolidating its position and driving sustainable growth by reshaping its business model. This entails expanding beyond traditional automotive manufacturing to encompass mobility solutions and programming services. Sato underscored Toyota's commitment to this endeavor, affirming their determination to allocate necessary resources and time to solidify their market presence.
In essence, Toyota's proactive approach underscores its recognition of the evolving dynamics within the automotive industry, marked by the increasing prominence of electric vehicles and AI-driven technologies. By strategically investing in these areas, Toyota aims to fortify its competitive edge and position itself for long-term success in a rapidly evolving market landscape.
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