TOKYO (Reuters) – Toyota Motor is increasingly focusing on the returns on performance measures, with internal talk about increasing ROE to 20% as a guideline, senior treasurer of Japanese automaker said in an interview on Monday.
The executive warned that ROE was not a perfect measure, but executives emphasized consistency rather than time-limiting goals, adding that Toyota did not want formal commitments to reach a specific level by a specific date.
“It is important not only to reach a certain proportion at a certain time, but to be consistent,” said Toyota’s accounting team CEO Masahiro Yamamoto.
ROE is a ratio that measures a company’s profitability relative to shareholders’ equity. Toyota’s ROE reached 15.6% from April to December 2024, which is consistent with 15.8% in fiscal 2023. The indicator increased from 9.0% in fiscal 2022, and 11.5% in the fiscal year prior to that.
Toyota has long struggled to increase its profit margins by reducing the cost of producing vehicles, thus reducing the breakeven point of its combined sales.
The next time the automaker may release ROE figures is in the second week of May, when it usually reports full-year financial results.
Yamamoto said on Tuesday in the U.S. imports from Mexico and Canada that Toyota (with assembly plants in both targeted countries) will provide information on the impact of tariffs once capacity.
Last month, Toyota said a nearly $14 billion factory in North Carolina (its 11th American manufacturing plant) was ready to start production and start shipping batteries in April using electric cars, including hybrids.
(Reported by Daniel Leussink and Maki Shiraki; Editor of Christopher Cushing)
