Published by Global Banking & Finance Review®
Posted on March 5, 2025
2 min readLast updated: January 25, 2026
Add as preferred source on GoogleToyota focuses on consistent ROE, aiming for 20% as a guideline, prioritizing stability over time-bound targets, says 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)
Toyota is aiming to raise its return on equity (ROE) to 20% as a guideline, focusing on consistency rather than time-bound targets.
Toyota's ROE reached 15.6% for April-December 2024, which is comparable to the 15.8% for the 2023 fiscal year.
Toyota is working to enhance its profit margin by reducing production costs, which helps lower the break-even point for its consolidated sales volume.
Toyota announced that its nearly $14 billion factory in North Carolina, its 11th U.S. manufacturing plant, is ready to begin production.
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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