Toyota reclaimed the crown of the world’s largest automaker through sales five years after losing it to Volkswagen, with the Japanese company being boosted by a strong rebound from the coronavirus pandemic.
The group, which also includes its subsidiaries Daihatsu and Hino, said on Thursday it had sold 9.5 million vehicles worldwide in 2020, just above 9.3 million. Sold by its German rival whose 12 brands include Audi, Porsche and Seat.
Both automakers have benefited from a strong recovery in sales in China, despite a tumultuous year of plant closures and supply chain disruptions from Covid-19. But Volkswagen has been hit hardest by declining sales in Europe.
For Toyota, demand for its luxury brand Lexus helped boost sales in China by 11% in 2020 – the only market to show year-over-year growth.
While the Japanese group’s global sales fell 11.3% from 2019, the fallout from the pandemic was also offset by strong demand for its RAV4 sport utility vehicle in the United States, its largest market. The subsidies have also helped boost gas-electric hybrids in Europe.
In December, sales to the United States jumped 20% from the previous year, while those to France and Germany climbed 85% and 89%, respectively.
Toyota lost his status as the world’s most valuable automaker for U.S. electric vehicle group Tesla last year, but the company’s focus on hybrids has paid off so far as it prepares to roll out battery-powered cars over the next two years.
“The spread of electric vehicles in Europe is probably faster than Toyota had anticipated, so the key is whether it can come out with advancements in battery technology,” said Yoshihiro Okumura, CEO of Chibagin Asset Management. . “The next two years will be crucial for Toyota in how investors view its EV strategy.”
Toyota has partnered with Tesla supplier Panasonic to develop solid-state batteries, which are expected to increase range and reduce charging times for electric vehicles. The automaker is expected to unveil the technology at the Tokyo Olympics scheduled for this year, according to people briefed on its plans.
Toyota said 23% of its global sales are now electrified vehicles, most of which are hybrids. Its hybrid technology, which it has been selling in its Prius model for 20 years, is why Toyota has one of the lowest average CO2 emissions per car of any manufacturer in Europe, although it does offer no fully electric vehicles.
Following the recovery in sales, investment bank Jefferies raised Toyota’s operating profit forecast by 25% to 660 billion yen ($ 6.3 billion) for the period October to December .
Still, analysts say Toyota’s outlook remains uncertain as the auto industry grapples with a global chip shortage that forced automakers to idle factories and take time off.
For the first three months of the year, Nomura estimates that global auto production could be around 20% lower than the companies forecast. However, he said Toyota would likely be the least affected due to the diversification of its supply chain following the Tohoku earthquake and tsunami in 2011.