Will Asia and Europe Continue To Push Toyota Growth ?

by Trefis Team
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Toyota Motors Corporation (NYSE: TM), the world’s largest automaker by sales, sells its cars mainly under three brands – Toyota, Lexus, and Scion. The company reported its Quarter 3 (ended December 2018), Fiscal year 2019 financials on February 6, 2019. The company beat consensus estimates in both earnings and revenues. Consolidated Revenue for the first 3 quarters stood at ¥22,475.5 billion ($202.5 billion) which is 3.3% above year-on-year (YOY). The operating margin improved by 50 basis point for the same quarter last year to 8.6%

We currently have a $147 price estimate for the company, which is above the current market price. View our interactive dashboard –Our Outlook For Toyota Motors In Fiscal Year 2019– and modify the key assumptions to arrive at a price estimate of your own.


There is a slight improvement on the volume of cars in the Asia and Europe regions. This was attributed to the changing consumer preferences in the market. It has been shifting toward SUV and crossover variants and also as a result of a decline in its passenger car market, as Toyota is not a mass producer of passenger vehicles. We expect Quarter 4 to be similar.

Even though sales volume was down in the local market (Japan) the operating income was up by ¥131.3 billion ($1.2 billion) YOY. This was attributed to cost reductions and marketing efforts in the region. While Europe and Asia increased in volume and operating income for the same period compared to last year, North America and Other Areas had a decrease in operating income attributed to raw material costs and weak local currencies.

In quarter 4 and full year results we expect the company to have a slight improvement in volume as compared to last year with most of it coming from Asia. The revenue is expected to be at around ¥29,500 billion ($265.8 billion) while the Net Income margin is expected to be around 8.1%

The company is also working toward the future i.e. autonomous mobility and electronic segments. In January 2019 it signed a agreement with Panasonic to establish a joint venture related to automotive prismatic batteries. For the automated driving sector in January 2019 the company rolled-out the P4 automated driving test vehicle and introduced Toyota Guardian(TM) autonomy at CES.


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