Shares of Toyota Motor Corp (TYO:7203) reached a historic peak on Wednesday following robust quarterly earnings and the announcement of increased investments in electric vehicles and semiconductor manufacturing. Toyota's Japanese shares surged by 4.7% to 3,283.0 yen, reaching a record high of 3,361.0 yen.
Simultaneously, Toyota’s U.S.-listed shares (NYSE:TM) saw an almost 8% surge in overnight trade, reaching a record high of $218.66.
The positive momentum extended to other automobile stocks, as smaller peers Nissan (OTC:NSANY) Motor Co., Ltd. (TYO:7201) and Suzuki Motor Corp. (TYO:7269) rose by 3.5% and 2.6%, respectively, on Wednesday. Despite this, the broader Nikkei 225 index remained flat.
Toyota's shares continued to rise after reporting stronger-than-expected earnings for the December quarter and forecasting a record-high profit for the fiscal year ending on March 31, 2024.
In the December quarter, Toyota's operating profit surged by 76% to 1.68 trillion yen ($11.3 billion). The company anticipates a record-high annual profit of 4.9 trillion yen ($33 billion). The impressive earnings were attributed to the booming sales of Toyota’s high-margin hybrid vehicles, along with the advantage of a weaker yen in overseas sales.
Alongside the positive financial results, Toyota disclosed plans for further investment in electric and hybrid vehicle production, injecting an additional $1.3 billion into a Kentucky plant. Despite a global decline in electric vehicle sales, Toyota, a pioneer in hybrid technology since the introduction of its Prius model nearly two decades ago, outperformed its global peers.
Furthermore, as part of risk mitigation against potential disruptions in global chip supplies, Toyota announced a minority stake in a new semiconductor plant being constructed in Japan by Taiwanese chipmaker TSMC (TW:2330) (NYSE:TSM).
The positive developments took precedence over an ongoing scandal at Toyota’s Daihatsu unit related to alleged safety certification test falsifications. In response, Toyota reduced its annual vehicle sales target after suspending all shipments from Daihatsu in late-2023. Both Toyota and its Daihatsu unit are currently under investigation by Japanese authorities.
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