Investing in Japan: Toyota keeps enlarging its business field including the "Woven City" project to build the first full-scale smart city in Japan

Toyota expands its business to new mobility fields, biotechnology, afforestation, environment and energy.

Toyota Motor Corporation has been developing new businesses in various fields such as housing, finance and telecommunications in addition to its main business of automobile manufacturing and sales. Recently, Toyota also focuses on fields such as automobile related business, new mobility fields, biotechnology, afforestation, environment and energy. 

Toyota recognizes developing new businesses is indispensable to maintain its vitality and grow sustainably. Toyota has announced a number of new businesses and initiatives since the beginning of this year. For example, Toyota will establish a preparatory committee for the "Hydrogen Value Chain Promotion Council," a new organization that promotes global cooperation on the use of hydrogen and the formation of a supply chain, together with private companies to build a hydrogen society. ENEOS, Kawasaki Heavy Industries, Kansai Electric Power, Kobe Steel, Toshiba, etc. will participate in this initiative. 

Toyota also announced that it has agreed with East Japan Railway and Hitachi to jointly develop a test vehicle equipped with a hydrogen-fueled cell and a hybrid system powered by a storage battery. A hybrid test train will be developed aiming for high-power control to drive railway trains larger than automobiles by fusing the railway technology and automobile technology of the three companies applying fuel cells that have already been put into practical use in automobiles to railways. 

In addition, Toyota has started the "Connected City" project in Susono City, Shizuoka Prefecture, aiming to build the first full-scale smart city in Japan where various latest technologies and services are introduced, verified and demonstrated. For example, in this city which Toyota calls "Woven City", roads are classified into three types: roads dedicated to fast vehicles, roads where pedestrians and slow personal mobility devices coexist, and roads dedicated to pedestrians. Several plans have been proposed, such as installing all the city's infrastructure underground including fuel cell power generation. Construction is scheduled to begin in early 2021.

Toyota seems to be on a recovery track from pandemic pain, the latest financial results show

Regarding to recent financial results, the spread of the new coronavirus has cast a long shadow on Toyota Motor's business performance. Operating income for the first quarter of 2020 (April-June period) was 13.9 billion yen, a significant decrease of 98% from the same period of the previous year. Due to the spread of the new coronavirus infection, many factories around the world stopped operating and automobile sales were sluggish. 

Toyota Motor Corp. is reforming its wage system to withstand such difficult situations. From 2021, Toyota will introduce a new system that eliminates regular salary increase in every spring and raises the salary only for employees with highly evaluated performance. The purpose is to enhance Toyota's competitiveness by introducing a system that rewards those who have worked hard so that Toyota can protect its employees at all costs. 

Even in a harsh environment, there is a silver lining on the horizon for Toyota’s business. Toyota Motor announced on November 6 that it has revised upward its consolidated earnings forecast for the full year ending March 2021. Toyota expects the operating income of 1.3 trillion yen, 2.6 times of the previous forecast of 500 billion yen indicating that sales are recovering from the damage of the new coronavirus outbreak. 

Toyota Motor's global sales in September 2020 increased 1.9% year-on-year to 837,000 units and global production increased 11.7% to 842,000 units. Sales and production reached record highs for the month of September driven by strong demand in China and the United States having turned positive year-on-year for the first time in 9 months. In the July-September quarter, global consolidated sales recovered to a level of 17.6% decrease from the same period of the previous year securing operating income of 506 billion yen in the last three months alone. 

Against the backdrop of improving performance, Toyota increased the interim dividend by 5 yen from the same period of the previous year to 105 yen per share. Toyota’s recovery is expected to continue steadily from now on with its global consolidated sales in the January-March quarter of next year to increase by 5% year on year.