Toyota's Enhanced Earnings Estimate, Attributed to Adhering to Their Own Guidelines (Revision of Toyota's 3rd-quarter Financial Figures)

Toyota's Resilient Performance Amidst the COVID-19 Pandemic

In a year marked by unprecedented challenges, Toyota Motor Corporation has demonstrated remarkable resilience, adapting to the pandemic and continuing to serve its customers thoughtfully.

The Japanese automotive giant has revised its full-year operating income forecast upward to 2 trillion yen, a significant increase from the 1.5 trillion yen reported from April to December 2020. This surge in earnings is particularly noteworthy considering the global semiconductor shortage that has affected many industries. Toyota plans to increase its full-year global sales volume by 300,000 units, a testament to its robustness in the face of adversity.

Toyota's success can be attributed to its focus on communication with stakeholders, including dealers, suppliers, and employees. The company has made efforts to improve communication, allowing employees to understand Toyota's future direction and reaffirm the importance of their tasks. This change in communication has proven instrumental in navigating the challenges posed by the pandemic.

Toyota has been proactive in helping society and the economy keep rolling. The company has taken actions to help improve productivity in the production of medical protective gowns and has been engaged in improving the overall process of vaccination venues in the United States and the United Kingdom using its Toyota Production System (TPS) know-how.

In response to the pandemic, Toyota dealers around the world have made efforts to serve customers more thoughtfully. For instance, they have provided disinfection services to customers who came for maintenance. Toyota has also started sending messages to the 5.5 million people working in the automobile industry at the beginning of the year due to improved remote communication capabilities.

Moreover, Toyota has been working closely with its suppliers to manage the semiconductor shortage. The company has secured one to four months of inventory for semiconductors and communicates closely with suppliers to ensure a smooth supply chain.

Toyota's improved procurement networks, developed after the 2011 Great East Japan Earthquake, have proven valuable during the COVID-19 crisis. The company's engineers visit supplier worksites to discuss quality standards and acceptable levels with suppliers, ensuring a high-quality product for customers.

In terms of product development, Toyota has introduced 10 new models last year and nine this year, despite the challenges posed by the pandemic. The company should focus on using digital twins and supply chain resilience to anticipate and mitigate disruptions, enabling agile decision-making especially during uncertainties like the COVID-19 pandemic. The key concept that emerged for Toyota was "resilience," particularly through proactive planning, strategic agility, and real-time responsiveness to maintain production continuity despite challenges.

CFO Kenta Kon and Chief Communication Officer Jun Nagata repeated that Toyota "did what we should do" during the Q&A session. The Toyota World Convention was recorded and distributed to 50,000 people, including general employees, for the first time, further emphasising Toyota's commitment to transparency and communication.

Close communication between Toyota and its stakeholders has been valued and is becoming more important during the COVID-19 pandemic. This focus on communication, coupled with Toyota's resilience and adaptability, has positioned the company well for the future.

Toyota's Enhanced Earnings Estimate, Attributed to Adhering to Their Own Guidelines (Revision of Toyota's 3rd-quarter Financial Figures)