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    Home > Finance > Toyota aims for consistent return on equity, finance executive says
    Finance

    Toyota aims for consistent return on equity, finance executive says

    Published by Global Banking & Finance Review®

    Posted on March 5, 2025

    2 min read

    Last updated: January 25, 2026

    Toyota aims for consistent return on equity, finance executive says - Finance news and analysis from Global Banking & Finance Review
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    Tags:equityfinancial managementcorporate profitsinvestment

    Quick Summary

    Toyota focuses on consistent ROE, aiming for 20% as a guideline, prioritizing stability over time-bound targets, says finance executive.

    Toyota aims for consistent return on equity, finance executive

    TOKYO (Reuters) - Toyota Motor is increasingly focusing on return on equity as a performance measure, talking internally about raising ROE to 20% as one guideline, a senior finance executive at the Japanese automaker said during an interview on Monday.

    While cautioning that ROE is not a perfect measure, the executive emphasised consistency over time-bound targets, adding that Toyota was not looking to formally commit to achieving a specific level by a certain date.

    "What's important isn't just reaching a certain percentage by a specific time, but maintaining it consistently," said Masahiro Yamamoto, chief officer of Toyota's Accounting Group.

    ROE is a ratio that measures a company's profitability relative to its shareholders' equity. Toyota's ROE reached 15.6% for April-December 2024, in line with the 15.8% for the 2023 fiscal year. The metric has increased from 9.0% in fiscal 2022 and 11.5% in the financial year before that.

    Toyota has long been working to improve its profit margin by reducing the cost it takes to produce its vehicles, thereby lowering the break-even point for its consolidated sales volume.

    Speaking before the U.S. imposed 25% tariffs on imports from Mexico and Canada on Tuesday, Yamamoto said Toyota - which has assembly plants in both targeted countries - would provide information about the impact of tariffs once it was able to.

    Last month, Toyota said a nearly $14 billion factory in North Carolina - its 11th U.S. manufacturing plant - was ready to begin production, with battery shipments for electrified vehicles including hybrids starting in April.

    (Reporting by Daniel Leussink; Editing by Christopher Cushing)

    Key Takeaways

    • •Toyota aims to maintain a consistent return on equity.
    • •The company is targeting a 20% ROE as a guideline.
    • •Consistency is prioritized over time-bound targets.
    • •Toyota's ROE has been improving over recent years.
    • •Impact of US tariffs on Toyota's operations is being assessed.

    Frequently Asked Questions about Toyota aims for consistent return on equity, finance executive says

    1What is Toyota's target for return on equity?

    Toyota is aiming to raise its return on equity (ROE) to 20% as a guideline, focusing on consistency rather than time-bound targets.

    2How did Toyota's ROE perform in recent fiscal periods?

    Toyota's ROE reached 15.6% for April-December 2024, which is comparable to the 15.8% for the 2023 fiscal year.

    3What measures is Toyota taking to improve profitability?

    Toyota is working to enhance its profit margin by reducing production costs, which helps lower the break-even point for its consolidated sales volume.

    4What recent developments have occurred in Toyota's manufacturing?

    Toyota announced that its nearly $14 billion factory in North Carolina, its 11th U.S. manufacturing plant, is ready to begin production.

    5How does Toyota view the importance of ROE?

    Toyota's finance executive emphasized that maintaining a consistent ROE over time is more important than reaching a specific percentage by a certain date.

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