[Earnings Preview] Is Toyota's good 1Q financial results a “source of recourse” for this fiscal year? Can we make spare capacity to withstand the headwinds of yen appreciation and certification fraud

Driven by hybrid cars, a good start to the world's highest sales volume
Group sales volume in the first quarter was 2.63 million6411 units, down 4.2% from the same period last year (2.75 million879 units).The forecast for group sales volume for fiscal year 24 is expected to be in the 10.95 million range, down 1.3% from the previous fiscal year, and by simple calculation, progress of 24.1%It has become.
The German Volkswagen Group sales volume, which is competing for global market share, is 2.3073 million units, with a difference of 0.3 million units or more, and has placed it in a good position for 5 consecutive years as the number one sales volume in the world.

What is driving sales are hybrid cars, which can be called Toyota's “home art.”
The number of units sold by Toyota alone was 2.49 million851 units, down 1.9% from the same period last year (2.53 million8288 units),Hybrid cars were 0.97 million8202 units, a significant increase of 22.5% from the same period last year (0.79 million8690 units)It became.The ratio of hybrid vehicles to total sales volume was 39.3%, up nearly 8 points from 31.5% in the same period last yearI did it.

The effects of successive authentication frauds have not been exhausted
The relative number of units sold compared to competitors seems to be an advantage,The overall sales volume of the group fell below the same month of the previous year for 5 consecutive months from February to JuneWe are in a situation where we can never say that things are going well.
The drop in unit sales has been greatly affected by supply shortages mainly domestically due to fraud issues in certification tests by the Ministry of Land, Infrastructure, Transport and Tourism. Fraud with Hino Motors, Daihatsu Motor, and Toyota Industries, which are under the umbrella of fiscal year 23 was discovered, and measures such as suspending production were taken for some models.
Furthermore, on 6/3, which entered this fiscal year, it was announced that certification fraud had also been carried out at Toyota itself. Shipments and production of the 3 models currently being produced domestically have been suspended,The suspension of production is expected to continue until the end of August. The impact also extends to results from the first quarter onwardsThat's going to happen.
In response to a series of certification fraud issues within the group, ToyotaIt positions fiscal year 24 as “solidifying a foothold” for future growth, and indicates a policy of “using necessary money and time”. President Koji Sato said at the financial results announcement for fiscal year 23, “We will work hard to improve individual skills and develop human resources with the idea of creating a way of working 10 years from now.”In fiscal year 24, 380 billion yen will be invested in “investment in people” to change the way we work, and the policy is to allocate 300 billion yen of these to suppliers and dealersThat's it.
Therefore, in the earnings forecast for fiscal year 24, sales are 46 trillion yen, which is 2.0% higher than the previous fiscal year, operating income is 4.3 trillion yen, down 19.7% from the previous fiscal year, and net profit is expected to decrease drastically, with net profit falling 27.8% to 3 trillion 570 billion yen. EPS is 264 yen 95 sen.

There is a possibility that not only financial results, but also strict opinions from overseas investors on Toyota's corporate governance will affect future stock prices. At the general shareholders' meeting held on 6/18, the approval ratio for the reappointment of Chairman Toyoda Akio from the founder's house fell from 84.57% the previous year to 71.93%, 12 points or more below, and was the lowest ratio among the directors that were reappointed.

Profit is expected to increase more than expected due to the depreciation of the yen
The estimated exchange rate for the full year is 1 dollar = 145 yen, but during the period it remained in the 150 yen range of 1 dollar = 150 yen. The company says that if 1 yen depreciates, operating profit will rise by 50 billion yen, and when calculated as 1 dollar = 155 yenCalculation that foreign exchange gains will boost quarterly operating income by 100 billion yen or moreIt becomes. The fiscal year 24 earnings forecast announced for the fiscal year 23 fiscal year is viewed as a “conservative figure,” including the exchange rate, and it is expected that the results for the first quarter will be higher than the figure obtained by dividing the fiscal year 24 forecast into 4 equal parts.
When comparing the earnings forecast for the first quarter based on the analyst average with the full-year forecast for fiscal year 24 by Toyota, sales volume (11 trillion576.5 billion yen) is 25.2% of the full-year forecast, which is a figure that almost divides the full-year forecast into 4 equal parts,Operating profit (1 trillion323 billion yen) is 30.8%, net profit (1 trillion186.7 billion yen) is 33.2%It has risen to, and there are many views that it exceeds company forecasts in terms of profit.

However, since observations of early interest rate cuts in the US and additional interest rate hikes by the Bank of Japan have surfaced, the yen has now appreciated, and the dollar yen exchange rate, which was in the 161 yen range at the beginning of July, has now risen to around 154 yen. As the appreciation of the yen progresses, the effect of increasing profit due to the depreciation of the yen will fade from the second quarter onwards.
Amid headwinds of a decline in domestic production due to certification fraud issues and an appreciation of the yen, how much “savings” were made in the first quarter also had a major impact on Toyota's full-year results for fiscal year 24I'll do it.

The number of EVs sold went according to plan, but the Chinese market struggled a lot
Certification fraud and yen appreciation are current headwinds, but medium- to long-term issues for Toyota are EV strategies and competition with the Chinese forces leading the way in EVs.
As for the target sales volume of EVs for fiscal year 23 for Toyota alone, the full-year sales forecast was revised downward from 0.2 million2000 units to 0.12 million3000 units when the interim financial results were announced, but the actual sales volume remained at around 0.11 million7,000 units. 0.17 million1000 units are scheduled for fiscal year 24, an increase of 46.2% from fiscal year 23.The number of units sold in the first quarter was 0.04 million2908 units, an increase of about 1.5 times compared to the same period last year (0.02 million8698 units), and the progress ratio of the fiscal year plan reached 25.1%。

Meanwhile, sales in China are struggling. Sales volume in the first quarter was 0.41 million584 units (0.49 million9483 units in the same period last year)Significant decrease of 17.8% compared to the same period last yearIt became. “Although sales activities have been strengthened, such as trade-in enhancement measures, etc.The intense market environment continued, such as intensifying price competitionIt's called”.
The sales competition in China will only be a litmus test for the upcoming “world war” with the Chinese team,Also pay attention to whether there are any statements regarding future recovery measures in financial results announcementsIt will be done.