On Wednesday, Japanese auto manufacturer Toyota stated that its profit from July to September plummeted by more than half compared to the same period last year, due to production stoppages caused by fraud scandals and recalls.

The company's third-quarter financial report shows that Toyota's quarterly net income totaled 573.7 billion yen ($3.7 billion), a 55% decrease from the same period last year when it was 1.28 trillion yen. The quarterly sales total slightly increased, rising from last year's 11.43 trillion yen to 11.44 trillion yen.

Toyota's Chief Financial Officer Yoichi Miyazaki stated that the main reason for the decline in Toyota's production in the first half of the fiscal year is its certification issues. Toyota needs time to re-examine its manufacturing environment and culture. Several Toyota cars were closely monitored by Japanese authorities due to falsified test data.

Toyota has pledged to invest more funds in human resources and growth areas to improve its business. Additionally, it is advancing its multi-path development plan, aiming to introduce hybrid cars, fuel cell cars, and electric cars based on market demand. The company also emphasizes that this investment in talent will extend to its subsidiaries and supply chain, with Toyota's car production expected to gradually recover in the second half of the fiscal year.

The company also emphasizes that this investment in talent will extend to its subsidiaries and supply chain, with Toyota's car production expected to gradually recover in the second half of the fiscal year.

Confidence remains.

Toyota's global car sales exceeded 11 million units in the previous fiscal year, ranking first in the world. It is expected that by the end of this fiscal year in March, its sales will reach 10.85 million vehicles. However, the latest data for the second quarter shows that Toyota's global sales for that quarter amounted to 2.3 million vehicles, below the expected 2.4 million vehicles.

This is directly related to Toyota's continuous quality scandals. The company admitted to widespread quality testing fraud in the past, including falsifying data in crash tests or using outdated data. It's because of these fraudulent acts being exposed that Toyota has suspended production of some models.

In addition to the fraud, Toyota has recalled its cars multiple times in the USA. According to the US National Highway Traffic Safety Administration, the recent recall of over 0.04 million vehicles was due to a lack of power brake assist systems that can extend braking distance.

However, despite the significant impact on Toyota's business this year, the company is still insisting that the full-year dividend will increase from 75 yen last year to 90 yen, and it maintains the expectation of a 4.3 trillion yen operating profit for the full year.

In addition to Toyota, other Japanese auto manufacturers have also faced cheating news almost simultaneously, including Honda, Suzuki, and Yamaha, among other well-known brands. Honda will announce its performance later today, the operating profit for the second quarter of the fiscal year ending September 30, 2024, was 257.9 billion yen in the quarter, far below the analysts' general expectation of 431.1 billion yen.