Toyota plans to invest in EVs and AI to compete with Chinese rivals

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good morning. Toyota expects annual profits to fall 20% as it ramps up spending on electric vehicles and artificial intelligence to create “game changers” to compete with Chinese rivals.

Despite a blockbuster year that pushed Toyota’s profits to record levels, yesterday’s weak outlook sent Toyota’s stock price down as much as 3% at one point.

It plans to invest 1.7 trillion yen in “growth fields” such as AI, electric vehicles, and software.

Toyota Motor Corp. Chief Financial Officer Yoichi Miyazaki said Toyota was “far behind” Chinese rivals in some areas, “enduring” a difficult few years and facing price competition from local brands. He added that people should avoid getting caught.

Today we’ll take a closer look at international automakers and their attempts to compete in the cutthroat Chinese car market.

Here are some other things I’m focusing on today:

• Hungarian Xi Jinping: Ahead of the visit, the Chinese leader praised Hungarian Prime Minister Viktor Orbán’s government for pursuing an “independent” foreign policy and “defying” great power politics.

• Economic data: China released its trade balance statistics for April, and the Philippines released its GDP for the first quarter.

• Financial policy: Malaysia issues a monetary policy statement and the Bank of England sets interest rates.

• result: Nippon Steel, Nissan, Panasonic, Japan Tobacco, Warner Bros. Discovery, and others have announced their financial results.

5 more top articles

1. A Hong Kong court bans the protest song “Glory to Hong Kong.” The judges used the term “weaponized” in a ruling that raises concerns about civil liberties in Chinese territory and pressures a group of US technology companies, including Google and Meta, to comply with increasingly stringent security regulations. It said it could be used and deemed inflammatory.

2. EU countries have agreed to use an estimated 3 billion euros in profits from Russia’s frozen state assets to make joint purchases for Ukraine. The agreement signed yesterday by the bloc’s 27 ambassadors covers only the profits made by Belgium’s central securities depository Euroclear, where around 190 billion euros of Russian central bank assets are held.

• War between Israel and Hamas: Secretary of Defense Lloyd Austin said the United States last week “suspended shipments of heavy munitions” to Israel, citing concerns about the looming ground operation in Rafah.

3. Shares in SoftBank-backed Arm fell about 8% after the British chip designer announced a lackluster outlook. For this year’s income. The group’s decline, below expectations of $3.8 billion to $4.1 billion, raised concerns that spending on artificial intelligence hardware by tech companies could slow.

• Airbnb: The home rental platform’s first-quarter profit more than doubled, but it expected second-quarter revenue and profit to be lower than expected.

4. Angola reaches agreement with China to ease debt crisis By unlocking cash from Chinese-controlled accounts to pay interest on critical loans, the country’s finance minister said. An unusual agreement between the southern African country and the State Development Bank of China highlights the Chinese lender’s efforts to provide payment support, rather than outright debt relief, to poor countries struggling to repay their debts. .

5. A company controlled by hedge fund manager Sir Paul Marshall has lost a legal battle. The South African government has teamed up with more than $43 million in silver bars recovered from the devastation of World War II in the Indian Ocean. Pretoria had argued that it was not obligated to pay Marshall’s salvage company for silver bars that the then Union of South Africa bought from the Indian government in 1942.

big reading

Prime office rents across Hong Kong have fallen nearly 40% since their peak in 2019, according to Cushman & Wakefield, and vacancy rates are at a record high of 16%, according to government figures. Will Hong Kong’s real estate market recover amid rising interest rates and falling prices?

I’m also reading. . .

• Japanese trading soars: Once treated with suspicion in Australia, a new wave of Japanese investment has deepened the partnership between the two countries, writes Nick Fildes.

• UK-India relations: Although there are clear signs of progress, domestic politics are complicating relations, writes Anand Menon of the UK think tank Changing Europe.

• The Bank of Japan’s vast stock portfolio: Toby Nangle writes that central banks have called time on ETF purchases, but have yet to say what they will do with the huge investments.

chart of the day

The 50 companies that were winners during the coronavirus pandemic have lost about $1.5 trillion in market value since the end of 2020, as investors turned away from many of the stocks that soared during early lockdowns.

Take a break from the news

This year’s Met Gala already felt surreal before a single person stepped foot on the red carpet. This was also due to the dress code. The film is based on JG Ballard’s 1962 short story “The Garden of Time,” in which an aristocratic couple defends themselves from an angry mob by plucking the dwindling crystal flowers that allow them to leave for short periods of time. Must be. Pause time. Here’s how participants interpreted this theme:

With Tee Zhuo gordon smith