Toyota aims to double return on equity to 20%, says executive

Move by automaker likely to push Japan Inc. to focus on capital efficiency

20241225 Toyota photo1

A Toyota executive said that reaching a return on equity of 20% is necessary for the carmaker to compete globally. (Photo by Koji Uema)

SHOTA UEHARA and KAZUHIRO NOGUCHI, Nikkei staff writers

NAGOYA, Japan -- Toyota Motor aims to double its return on equity (ROE) target to 20%, up from the market forecasts of 11% for the fiscal year ending March 2025, according to an executive with the automaker who asked not to be named.

ROE is a key measure of a company's profitability, calculated by dividing net income by shareholders' equity.

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