Toyota Motor reported a net profit of 1.3 trillion yen ($8.9 billion) for the April-June quarter, up 1.7% year-on-year, despite facing sluggish sales in Japan due to a certification scandal and recalls. Operating income rose 17% to match the expectations of analysts, supported by cost reductions and a weak yen, although total global sales declined by 2%. Challenges in the Chinese market and ongoing fallout from safety test irregularities have raised concerns about the company's future performance. Analysts predict that while hybrid demand could sustain profitability, Toyota may experience its weakest profit growth since 2022, forecasting a full-year profit decline of 20%. Hybrids accounted for 39% of Toyota's global sales in the first half of the year, indicating a strategic pivot amid slower electric vehicle demand. Following the earnings report, Toyota's share price dropped significantly, reflecting investor concerns over its outlook.