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The Toyota logo is seen at its booth

By Eimi Yamamitsu

The world’s biggest automaker by vehicle sales expects renewed demand in the United States, its biggest market, to drive that recovery and forecast overall sales to grow 6.4% to 10.55 million vehicles for the year.

“Due to the spread of COVID-19 in each region, sales volume declined significantly in the 1st half of the fiscal year. But in the 2nd half of the fiscal year, sales volume increased in many regions compared to the previous fiscal year,” CFO Kenta Kon told a press briefing.

Toyota shares reversed course to rise 2.1% after the results on Wednesday, contrasting with a 10% tumble for smaller rival Nissan whose guidance disappointed investors.

Toyota surprised rivals and investors last quarter when it said its output would not be disrupted significantly by ongoing chip shortages even as Volkswagen, General Motors, Ford, Honda and Stellantis, among others, have been forced to slow or suspend some production.

The global auto industry has been grappling with that chip shortage since late last year, which was worsened in recent months by a fire at a chip plant in Japan and blackouts in Texas where a number of chipmakers have factories.

Analysts have said Toyota has so far been largely unscathed likely due to its chip stockpiling policy.

The maker of the RAV4 SUV crossover and Prius hybrid almost doubled its fourth-quarter operating profit to 689.8 billion yen, beating an estimate of 641.5 billion yen from 10 analysts compiled by Refinitiv. The profit was 369.9 billion yen in the same period a year earlier.

Its forecast of 2.50 trillion yen for the year that began on April 1, however, was lower than the 2.65 trillion yen average profit forecast from 24 analysts compiled by Refinitiv.

Nissan said on Tuesday it expects to break even this business year, defying expectations for a return to profitability, as the global chip shortage and commodity price hike curb the car maker’s recovery from a record annual operating loss.

Japan’s second-biggest automaker Honda, which is due to report annual results on Friday, said in February it expects a 520 billion yen profit for the year that ended in March.

($1 = 108.8500 yen)

(Reporting by Eimi Yamamitsu; Editing by Tom Hogue and Muralikumar Anantharaman)

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