Scandal-hit car maker Toyota sees profits take a tumble

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Japan’s biggest car maker, Toyota, saw profits for the July-September period sliding to less than half of what they were in the same period last year.

The maker of the Camry sedan and Lexus luxury models revealed that a production stoppage that followed a certification scandal and model recalls had dented sales.

Toyota apologised and suspended production on a number of models after acknowledging widespread fraudulent testing, including the use of inadequate or outdated data in crash tests, as well as incorrect testing of airbag inflation.

Fraudulent tests were also found at Toyota group makers Hino Motors and Daihatsu Motor Co.

Quarterly profits to September totalled 573.7 billion yen (€3.4bn), down from nearly 1.28 trillion yen (€1.8tn) the same quarter last year.

Quarterly sales revenue rose slightly to 11.44 trillion yen (€69bn) from 11.43 trillion yen.

Toyota sold more than 11 million vehicles globally the previous fiscal year. Toyota now expects to sell 10.85 million vehicles for this fiscal year through March.

For the latest quarter, Toyota sold 2.3 million vehicles globally, down from 2.4 million vehicles.

More investment in people promised

Toyota officials promised to do better by investing more in “human resources and growth areas”, while pursuing what the car maker calls “multi-pathway”, meaning it will push hybrids and fuel cells as well as electric vehicles, depending on market tastes.

Such investment in people will extend to its subsidiaries and supply chains, they said. Vehicle production will recover in the second half of the financial year, according to Toyota.

Japan production declined in its first half because of “the need to address the certification issues and taking time to reexamine our manufacturing environment and culture,” Chief Financial Officer Yoichi Miyazaki told reporters.

Toyota production at its US Indiana plant was halted temporarily for recalls but is back up from last month, he said.

Toyota stuck to its full fiscal year forecast for a 3.57 trillion yen (€21.1bn) profit, down from 4.94 trillion yen made on the previous year.