Toyota aims for consistent return on equity, finance executive says

TOKYO (Reuters) - Toyota Motor is progressively focusing connected instrumentality connected equity arsenic a show measure, talking internally astir raising ROE to 20% arsenic 1 guideline, a elder concern enforcement astatine the Japanese automaker said during an interrogation connected Monday.

While cautioning that ROE is not a cleanable measure, the enforcement emphasised consistency implicit time-bound targets, adding that Toyota was not looking to formally perpetrate to achieving a circumstantial level by a definite date.

"What's important isn't conscionable reaching a definite percent by a circumstantial time, but maintaining it consistently," said Masahiro Yamamoto, main serviceman of Toyota's Accounting Group.

ROE is simply a ratio that measures a company's profitability comparative to its shareholders' equity. Toyota's ROE reached 15.6% for April-December 2024, successful enactment with the 15.8% for the 2023 fiscal year. The metric has accrued from 9.0% successful fiscal 2022 and 11.5% successful the fiscal twelvemonth earlier that.

Toyota has agelong been moving to amended its nett borderline by reducing the outgo it takes to nutrient its vehicles, thereby lowering the break-even constituent for its consolidated income volume.

Speaking earlier the U.S. imposed 25% tariffs connected imports from Mexico and Canada connected Tuesday, Yamamoto said Toyota - which has assembly plants successful some targeted countries - would supply accusation astir the interaction of tariffs erstwhile it was capable to.

Last month, Toyota said a astir $14 cardinal mill successful North Carolina - its 11th U.S. manufacturing works - was acceptable to statesman production, with artillery shipments for electrified vehicles including hybrids starting successful April.

(Reporting by Daniel Leussink; Editing by Christopher Cushing)