Toyota Motor Corp.

According to the Federation of Thai Industries, released on the 25th, July auto production totaled 117,383 units, up 6.12% year-on-year, turning positive from June's 7.55% decline. Domestic sales increased 20.07% year-on-year, accelerating from June's 17.26% growth. Exports also recovered, up 2.39% year-on-year, compared to June's 7.45% decrease. Thailand is Southeast Asia's largest auto production hub and serves as an export base for major global manufacturers such as Toyota and Honda. The federation forecasts that full-year auto production in 2026 will decline by 3.33%.

The United States is preparing to reduce import tariffs on automobiles from Canada to 15% from the current 25%, as part of a trade agreement under negotiation, with Canada required to lift trade measures imposed in retaliation against the US. Multiple foreign news agencies reported, citing sources, that under the new agreement the tariff rate for Canadian autos would fall to 15%, while details of the deal are still being finalized and there remains a possibility that President Donald Trump could adjust terms late in the negotiations or scrap the agreement, as has happened in past trade talks. The two countries are also discussing ways to expand the list of parts and value eligible for additional tariff exemptions, but no final decision has been made so far. If an agreement is reached on that issue, it would further reduce the tariff burden on automakers. The tariff cut could be a major victory for Canada's auto industry, including major manufacturers such as Toyota, Honda, General Motors, and Ford, which all have production bases in Canada and export vehicles to the US market. Last year, the US announced 25% tariffs on imported cars and trucks built outside the country, while for vehicles produced in Canada and Mexico, the US would levy tariffs only on the value of parts not made in the US, in an effort to push manufacturers to increase domestic production and use more local parts.

Japan's imports and exports set records in July as soaring energy costs and a weak yen extended the trade deficit for a third straight month. The Finance Ministry said the trade deficit totaled 634.5 billion yen, or 4 billion dollars, with imports surging 27.8 percent to 12.15 trillion yen and exports rising 23.2 percent to 11.51 trillion yen. Both figures were the highest for July since comparable data became available in January 1979. The war in Iran has sent crude oil prices soaring, and Japan, which imports almost all its oil, has been seeking alternative energy sources including the U.S. The yen's weakness has boosted earnings for exporters like Toyota Motor Corp. but made raw materials and food more expensive.

LG Energy Solution has started production at its new battery manufacturing facility in Lansing, Michigan, as the South Korean company expands its North American supply base for both energy storage systems and electric vehicles. The 226-acre plant is designed to reach more than 35 gigawatt-hours of annual battery production capacity at full scale, with the company investing more than $2 billion in the facility since 2022 and expecting employment to rise from about 900 workers currently to 1,700 at full production. The Lansing plant will manufacture lithium iron phosphate cells for energy storage applications as well as higher-energy-density nickel-manganese-cobalt cells for electric vehicles, with the LFP cells integrated into utility-scale and commercial storage systems by LG Energy Solution Vertech and Michigan utility DTE Energy among the customers. On the automotive side, Lansing will manufacture NMC cells for Toyota, including batteries intended for vehicles such as the 2027 Toyota Highlander EV, under a long-term U.S. battery supply agreement covering about 20 gigawatt-hours annually. The facility was originally developed as an Ultium Cells joint venture between LG Energy Solution and General Motors, but GM agreed in 2024 to sell its interest in the nearly completed plant to its Korean partner, and LG Energy Solution now operates two manufacturing facilities in Michigan with more than $5 billion invested in the state since 2010.

U.S. auto dealership acquisitions rose 14.3% in the first half of 2026 compared with the same period in 2025, while the number of transactions increased just 3.2%, according to the Q2 2026 Haig Report from Haig Partners. The report also introduces a new Franchise Horsepower Index measuring new-vehicle economics, finds buyers completing larger transactions and concentrating capital on premium franchises, and identifies Honda as one of today's most attractive acquisition opportunities. Five transactions involving five or more dealerships were completed during the first half of 2026, compared with none in the same period last year. The average blue sky value of a publicly owned dealership was $18.2 million for the twelve months ended Q2 2026, essentially unchanged from the first quarter and more than twice the $8.3 million average recorded in 2019, though down modestly from $19.0 million in full-year 2025. Premium luxury franchises represented 36.1% of acquisitions by Top 20 dealer groups during the last 24 months, up from 22.8% during 2020 and 2021, while domestic franchises fell from 28.7% to 15.1% over the same periods. Haig Partners raised its estimated blue sky multiple ranges for Toyota and Lexus, reduced the top end of its Porsche range, and said Honda's estimated blue sky multiple remains nearly 20% below Toyota's, creating what it believes is an unusually attractive buying opportunity.

Idemitsu Kosan President Noriaki Sakai confirmed on the 18th that the company has begun transporting Saudi Arabian crude oil via a detour route through Suez, as passage through the Strait of Hormuz and the Bab el-Mandeb Strait has become difficult. Previously, shipments arrived in Japan in about 20 days, but the new route is said to take 50 to 60 days. While acknowledging higher costs, Sakai stressed, "We are confident that we can properly procure what is needed. There will be no major disruption on the procurement front." Idemitsu has not disclosed details of the alternative route, but supplier Saudi Aramco has since July been increasing supplies on a route from the Saudi port of Yanbu northward through the Red Sea, across the Mediterranean, and around the Cape of Good Hope. Sakai also said the company will expand use of North American crude, but he was negative about sharply reducing dependence on the Middle East, pointing out that Japanese refineries are equipped to process Middle Eastern crude, and that significantly increasing imports of US crude with different properties would require investment in refining facility upgrades. Regarding the 500 million dollar investment in MidOcean Energy, a British LNG business under US investment firm EIG announced in March, he said LNG was an important missing piece in the business portfolio and indicated a policy of entering the LNG sales business mainly in Japan. He also explained that there is interest from companies other than automakers in the commercialization of solid electrolytes for all-solid-state batteries being pursued jointly with Toyota Motor, and expressed a view that advances in drones and robots such as humanoids will drive replacement with solid-state batteries.

Commerce Secretary Howard Lutnick said President Donald Trump's Section 232 auto tariffs are bringing thousands of manufacturing jobs back to the United States. In a Fox Business interview, Lutnick cited Ford Motor Co.'s decision to move Lincoln production to the U.S. in 2030 and Toyota Motor Corp's expansion of U.S. manufacturing, including Tacoma and Tundra truck production in San Antonio, Texas, and Kentucky. He said companies are training young people right out of high school for high-tech manufacturing jobs at wages starting around $23 an hour. Ford CEO Jim Farley said tariffs were a big part of the decision to build some Lincoln models domestically, noting the Lincoln Nautilus imported from China faces a 52.5% tariff.

Secretary-General of the Office of the National Economic and Social Development Council, Danucha Pichayanan, said Toyota is unlikely to move its production base from Thailand to Indonesia, because Japan has invested in Thailand for more than 30 years and has a supply chain that has expanded both broadly and deeply. Relocating would require detailed readiness considerations. At the same time, he believes Toyota and Japan still see Thailand as an efficient production base, and the Ministry of Finance's measures will help investment expand better. Danucha also reiterated Thailand's neutral stance of not taking sides in the AI war between the United States and China, while continuing to accelerate investment attraction in PCB and chip design. As for the Thai Chuay Thai Plus Phase 2 programme, he said it must wait for monthly economic data before deciding, especially given energy risks that remain volatile.

Japan's economy grew at an annualized rate of 1.1% in the April-June quarter, according to government data released Monday. Real GDP rose a seasonally adjusted 0.3% from the previous quarter, down from 2.1% annualized growth in January-March. Private consumption dipped 1.2% while exports grew 0.5%, driven by global demand for Japanese autos and semiconductors. Government consumption rose 1.6%. The economy has been hurt by the war in Iran, which has sent energy costs surging, and a weak yen has raised import prices and dented consumer spending.

Joby Aviation expects to begin eVTOL Integration Pilot Program flights in Texas in September 2026, marking a key operational test as the company works toward carrying its first passengers this year. The flights will cover routes across the Dallas-Fort Worth area over a week, progressing from pilot-only operations to nonpaying and eventually paying passengers under the eIPP framework. Joby has completed or substantially completed three of five FAA type-certification stages and was about 75% through the fourth stage at the end of the second quarter, with continued progress in the fifth and final stage. Manufacturing is scaling up, with five aircraft flying as of the second quarter, including its first FAA-conforming aircraft, and 12 more in production, while the nonconformance rate in manufacturing fell nearly 40% in the first half of 2026. Toyota and Joby formed a manufacturing joint venture in June 2026, with Toyota holding 51% and Joby 49%, and Uber plans to offer Uber Air powered by Joby through its app when service launches.

President Donald Trump declared that tariffs have been incredible, bringing in hundreds of billions of dollars and spurring major companies to shift production to the United States. Toyota recently announced a $3.6 billion investment in a new facility at its San Antonio manufacturing campus, moving Tacoma pickup truck production from Mexico and creating over 2,000 jobs. Stellantis announced a $13 billion US investment, the largest in its history, to expand domestic production by more than 50%. The White House also highlighted investments from Kraft Heinz and numerous semiconductor and energy businesses as evidence of returning production. Trump pointed to record stock market highs and said the country is rocking and rolling, while economists note that tariffs can raise consumer costs, with the Joint Economic Committee estimating they cost the average American family more than $1,700 over a recent 12-month period.

As Japanese companies announce their earnings, the weak yen is boosting performance, but there is growing caution about side effects such as higher raw material costs and sluggish consumption. Mitsubishi Electric CFO Fujimoto noted that the assumed exchange rate of 150 yen is stronger than the post-intervention level, leaving room for further upside, while Toyota Motor and Mitsui & Co. also raised their earnings forecasts, citing the weak yen as a tailwind. However, Denso and Sharp were forced to report profit declines or downward revisions due to soaring component costs, and Yoshinoya Holdings and Kagome also pointed to the impact of rising costs and slowing domestic sales. Companies have also voiced concerns about rapid currency fluctuations, with Itochu and Toyota calling for stable exchange rates. Regarding the appropriate level, CFOs at Mitsubishi Corporation and Mitsui & Co. expect the trend of a strong dollar and weak yen to continue, while Mitsubishi Electric CFO Fujimoto indicated that the company does not anticipate a return to the 120 yen range.

Toyota Motor plans to produce 10.5 million vehicles worldwide in 2027, including Lexus, as hybrid demand rises and total output moves above ten million units. The production plan has been shared with major parts suppliers, according to a report from Nikkei Asia. Output in Japan is expected to total at least 3.5 million vehicles, above the three million-unit benchmark Toyota maintains to preserve domestic manufacturing capabilities and employment. Global hybrid sales increased 4% year-on-year to 2.33 million units in the first half of 2026, with Toyota's global hybrid sales projected to exceed five million units for the first time in fiscal 2026. The company plans to start producing next-generation hybrid batteries in 2027 or 2028 by converting production lines in Japan to support capacity equivalent to 600,000 units.

The consolidated April–June results for Japan's seven major automakers are now in, with Toyota Motor posting a net profit of 1.477 trillion yen, up 75.6 percent year on year, and Honda roughly 2.3 times higher, as a weaker yen and reduced US tariff burdens lifted earnings. Nissan Motor and Mazda, which were in the red a year earlier, also swung to a profit, and six of the seven companies — all except Subaru — saw earnings improve. A weaker-than-expected yen and lower US tariff rates under the Japan–US agreement provided a tailwind, while sales in North America and Japan remained solid. Honda Chief Financial Officer Masao Kawaguchi noted that the surge in raw material prices triggered by worsening Middle East tensions had also eased from June and did not rise as much as anticipated.

Toyota Motor Corporation upgraded its full-year FY2027 outlook and announced a ¥1,000.00 billion share repurchase program. The company now projects ¥54,000.00 billion in sales and ¥3,250.00 billion in net income for the fiscal year, following first-quarter revenue of ¥13,525.40 billion and net income of ¥1,477.04 billion. The buyback covers up to 500,000,000 shares through August 2027. The upgraded guidance reflects confidence in earnings power amid accelerated investments in hybrid and battery-related initiatives.

Toyota Motor stock still appears reasonably valued after a profit forecast upgrade and a ¥1 trillion buyback announcement. The company trades on a price-to-earnings ratio of 9.0 times, well below the auto industry average of 13.5 times and a peer group average of 14.7 times. Simply Wall St’s fair P/E for the stock is 17.7 times, indicating the market is pricing Toyota at a meaningful discount. The stock has returned 70.2% over the past five years, but broader valuation checks present a mixed picture, with a score of 4 out of 6. Plans to expand electrified vehicle and battery production, along with the buyback, support sentiment, while softer global unit sales and operational disruptions highlight execution risk.

Toyota Motor raised its full-year guidance after reporting a 75.6% surge in first-quarter net income to 1.47 trillion yen. Consolidated sales revenue for the three months to June 30, 2026, rose 10.4% to 13.52 trillion yen, while operating income fell 8.8% to 1.06 trillion yen. The net profit jump was driven mainly by below-operating-line gains, including the disposal of part of Toyota's holding in Toyota Industries Corporation and the deconsolidation of Hino Motors. Toyota lifted its fiscal 2027 operating income forecast to 3.40 trillion yen from 3 trillion yen, its sales revenue forecast to 54 trillion yen from 51 trillion yen, and its net income forecast to 3.25 trillion yen from 3 trillion yen.

Toyota reported first-quarter net profit of 1.48 trillion yen, a 76% surge from 841 billion yen a year earlier, driven by a weak yen and higher financial income even as vehicle sales dipped. Revenue rose 10% to 13.5 trillion yen, while operating income fell 8.8% to 1.06 trillion yen as higher expenses offset a 345 billion yen currency tailwind. The automaker raised its full-year revenue forecast to 54 trillion yen and net profit forecast to 3.25 trillion yen, though the profit outlook remains 15.5% below the prior fiscal year's 3.85 trillion yen. Toyota also announced a share buyback of up to 1 trillion yen, covering as much as 4.2% of outstanding shares. A 7.1 magnitude earthquake that struck Kumamoto in southwestern Japan on July 28 halted production at Toyota's facilities in the Kyushu region, according to ABC News.

Toyota Motor will begin production of next-generation batteries for hybrid vehicles in Japan from 2027 to 2028. At a financial results briefing on the 4th, General Manager of the Accounting Division Takanori Azuma revealed that the company will switch its domestic production lines, which have a capacity of 600,000 units, to high-performance, low-cost next-generation batteries. The next-generation batteries are expected to reduce costs by tens of thousands of yen per vehicle, and by 2030, Toyota plans to sequentially switch its battery production lines from nickel-metal hydride batteries to lithium-ion batteries while also boosting production capacity. Additionally, as a long-term plan, it was disclosed that China's leading automotive battery maker CATL will produce 200,000 hybrid vehicle batteries for Toyota in Indonesia. Toyota's global hybrid vehicle sales are projected to exceed 5 million units for the first time in 2026, and these initiatives aim to strengthen the competitiveness of its hybrids, leading to further demand and profit growth.

Toyota is set to report higher revenue and earnings for its fiscal first quarter despite a decline in global sales. The world's largest automaker is expected to post adjusted revenue of 13.06 trillion yen, up about 7% from a year ago, with adjusted earnings per share estimated at 82.44 yen. Analysts see adjusted gross margin falling to 16% from 18% and EBITDA margin to 12% from 14%, indicating cost pressures. Global sales, including Lexus, fell 2.9% in the first half of 2026 to 5.01 million vehicles, the first January-to-June decline in two years, though electrified vehicle sales rose 9.1% to 2.71 million. Toyota also plans to invest $3.6 billion to add a second assembly line at its San Antonio plant, shifting Tacoma production from Mexico to Texas.

Domestic new car sales in July rose 6.8% year-on-year to 417,163 units, according to data released on the 3rd by the Japan Automobile Dealers Association and the Japan Light Motor Vehicle and Motorcycle Association. The breakdown shows standard passenger cars and commercial vehicles increased 9.7% to 276,679 units, while minivehicles rose 1.6% to 140,484 units. Toyota and Honda posted double-digit gains, and Nissan turned positive for registered vehicles excluding minivehicles for the first time in 20 months, helped by the launch of new models such as the luxury minivan Elgrand and the SUV Kicks. Suzuki and Daihatsu also performed well.